5 Simple Ways to Increase Your Cashflow
Ever heard the phrase, “Cash is King”? It’s true in your personal life, and even more so in your business life. As an owner, manager, director, or controller, knowing the ins, outs, ups, and downs of your organization’s cash flow position is a must. It is essential to know where your dollars are made and how they are spent to determine if, how, and when changes should be made to increase your bottom line.
Cash flow statements measure how well a company generates cash (income) to pay its debt obligations (expenses) and fund its operating expenses.
This quick list of cash flow DOs is sure to help you make positive changes in your company's finances:
#1 - Bill consistently and on time
Train your customers not only to expect invoices but actually to pay them on time. Invoices sent out immediately get paid faster. Don’t delay once a deal is made or a project is completed.
#2 - Offer Discounts for Early Payment
Every penny counts! Many clients appreciate early payment discounts; the most common discount is 2/10 Net 30, which means customers can earn a 2% discount by paying in 10 days.
#3 - Lease, Don’t Buy
If you don’t have the cash to flat-out buy equipment, or you don’t qualify for a working capital loan, consider leasing equipment. Having a lower monthly payment may be what you need to keep your cash flow in check to maintain a positive cash stream for day-to-day operations.
#4 - Increase Prices
When was the last time you adjusted your pricing? It is a good idea to review the cost of your goods to the selling prices regularly. A few questions to consider:
What are my competitors charging?
Have the prices for equipment or inventory increased?
Do my prices compensate for the time put into my creating my products?
Do my products come off as cheap or valuable?
#5 - Ask for Deposits or Advance Payments
Companies whose product or service requires substantial cash or effort before delivering benefit considerably from asking clients for a deposit or milestone payment upfront.
Every organization has its own intricacies and particulars that will dictate how to implement these principles into your everyday practices. The experts at Benay are excited to help you analyze and optimize your cash flow. Go ahead, ask me about making yours the best it can be.
Have a fantastic day,
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