Diligence pays off when it comes to cash flow
FOSS Business Solutions provides cash flow management services and tools for our small business clients, but for you DIY's, here are a few good tips.
Cash flow management and forecasting should be a weekly activity. It will pay off if you are diligent about the following:
- Maintain cash reserves - When shortfalls occur, you'll be less stressed if you have some backup funds in the bank.
- Request and expect prompt receivables - When your customers know that you have this consistent expectation, they are more likely to pay promptly. You might even consider offering discounts for early payment.
- Get looser terms for yourself - On the other hand, especially as you are starting up, ask your creditors to reasonably extend your payables dating, and be sure to pay on time!
- Delegate cash flow monitoring - Designate one person to monitor your business' cash flow and ask for a weekly or bi-weekly report thereof.
