Unfortunately, there’s no quick fix for cash flow problems. However, with a little patience and focus, you can learn to maximize the cash flow of a new or existing operation with a few simple changes!

Five Ways to Improve Cash Flow

Your first thought might be to extend the time to pay account payables and shorten the time to take in receivables. Yet, depending on the method, that can be short-sighted and create problems with vendors.

The good news: there are solid ways to improve cash flow. Here are some tips and strategies that will help you put controls in place to increase cash flow without damaging supplier relationships.

Think About Now and Then

First, get a handle on where you currently stand with cash flow and where you want to be in the future. Think about whether you will need to add employees or keep more inventory on hand. Does your business need to move to a larger location?

Take time to think through the needs of your business and make projections. Knowing where you are and where you want to go is the first step in creating your roadmap to success!

Check Your Payment Procedures

Second, reevaluate the terms you are using to pay vendors and receive payments from your customers. If it makes sense for you to offer a discount to receive payments faster, check to see if your customers would be interested.

Also, work with your suppliers to negotiate better terms. If possible, you may be able to take advantage of early payment discounts that will save you money in the long run.

Establish and Stick to Payment Plans with Customers

Third, make sure that you have an efficient collections system in place that works for you. If you routinely receive payments late from customers, identifying these issues and establishing boundaries will help your cash flow tremendously.

Routinely check to see the average days outstanding for receivables and payables. Charting progress to keep track will make it easy for you and your staff to be on the same page.

Thoroughly Track Inventory

Fourth, control inventory — probably the most critical area where cash flow gets off track. If there are slow-moving items in your inventory, get rid of them! If there are items you are always out of, consider buying more substantial quantities to turn this inventory faster.

Once inventory problems are identified and fixed, your cash flow will begin to improve.

Make It a Team Effort

Fifth, communicate cash flow issues and successes with your staff. Consider making a company policy if you don’t already have one. Make this topic a routine part of weekly or monthly discussions so that everyone realizes the targets that need to be hit and how essential your staff is in creating a positive flow.

Once your employees know the importance of the goal, they will support your cash flow objectives. Communication is the key to getting everyone on the same page to drive cash flow in the right direction.

Start Plugging Those Cash Flow Leaks Today!

Think about the goals and needs of your business and establish ways to get your cash flow where you want it to be. Working on cash flow procedures may take time, but is completely worth the effort.

And if you need help developing an effective cash flow plan for your business, call Sheles Wallace! As a certified ActionCOACH, Sheles will help you make the map that will lead you to cash flow success.

Contact us today! 832-371-6642

About the author, Sheles Wallace

Sheles is an award-winning business coach who gets results for her clients.

For over 15 years, she has helped business owners achieve their goals and

take their businesses to the next level. If you're ready to take the next

step in your business evolution and go from an owner who wears all hats to

creating a commercial, profitable enterprise that runs without you, find out

more here: https://calendly.com/sheles/introduction