Tweet

Money Getting Tight? 5 Ways How To Control Your Cash Flow

Written by: Lee Lister

Article Overview: In these tough business times, protecting your cash flow, the lifeblood of your business, becomes very important. Problems with managing your income can be lethal to your company so here are 5 ways to manage your money more effectively.

Money Getting Tight? 5 Ways How To Control Your Cash Flow

In these tough business times, protecting your cash flow, the lifeblood of your business, becomes very important. Problems with managing your income can be lethal to your company so here are 5 ways to manage your money more effectively.

Collect Money As Quickly As Possible:
• Ensure that your business processes between delivering an item and your customer receiving their invoice are as tight as possible. Also ensure that they receive it as quickly as possible.
• Ensure that you have terms that encourage prompt payment, clearly shown on the invoice and known to your customer.
• Consider reviewing your terms to offer an % discount on payments due, if they are paid very quickly – say 10 days. Your customers may also wish to save money.
• Pay your money in as soon as you can. Some banks don’t credit money until the next day, if they receive money after a certain time of the day.

Save Money Wherever Possible.
• Review your banking services to ensure that you have the best possible deal and are paying the least possible.
• Review your past bank statements to ensure that you are not paying unnecessary bank charges due to exceeding your overdraft or not paying in money quickly.
• Review your credit card statements to ensure that you are not paying late and being penalised. Check that you are paying enough to minimise any credit card interest charges.
• Check your payment processing account to check that you not paying fees that you do not need to and that you have the best account possible.
• Make sure that your money is in the best paying account – ie if your current/checking account pays more interest than your processing account, then transfer the money there as quick as possible. Even a few days interest soon adds up.
• If you have excess money in your current/checking account – move it a higher paying account or consider paying off a loan earlier in exchange for a refund of charges or interest payments.
• Review yours and your staff’s expenses and petty cash payments to ensure that they are minimised.
• Check all your invoices and bank statements etc to ensure that no mistakes have been made. You might be surprised as to how often this happens.
• Review your products and services and consider dropping those that are not making money or consolidate them.
• Review all your expenditure and planned expenditure for any savings that you can make. Ensure that you are getting the best price for everything.
• Try doing things in a different way if it saves money.


Don’t Pay Until You Have To.
• Don’t pay any invoices until you have to – unless you are offered a discount obviously.
• Suggest to your creditors that you can pay your invoices earlier for a discount – providing you can of course.
• Put as much on your credit card as possible – say your travel, gas/petrol, hotels, restaurants etc. This gives you up to 30 days to enjoy your money. Make sure that you pay these bills at the end of the month so that you do not incur interest bills.
• Don’t lend employees any advances.
• Stock is dead money – it can’t be spent until you have sold it. Keep your stock to a minimum. Don’t go overboard so that it looks as if you are having financial problems.
• Consider leasing new items rather than buying outright or buying using a loan.

The one thing to remember is not to cause your customers and suppliers any concerns with your activities. Don’t give them the idea that you have money problems or your credit will start to be affected and you may find it difficult to keep your banking facilities and customers.

Related Articles
  CASH FLOW - You're Forgiven for Misunderstanding the Term!
  Internet Cash Flow-Finding A Cash Flow Business
  Top Ten Tips for Improving Your Cash Flow
  Ad battling in a crisis
  Borrowing Money - Banker Key Questions

Article Tags: bank statements, banking services, best possible deal, business processes, business times, cash flow, checking account, credit card interest, credit card statements, credit money, excess money, few days, interest charges, interest payments, invoice, lifeblood, overdraft, payment processing, petty cash payments, time of the day



Related Forum Posts
Re: Improving Cash Flow - Thanks for your information. guide on how to avoid the problems of over trading. <-- Where is this guide? Any URL? guide on debt factoring and invoice discounting: the basics. <-- Where is this guide? Any URL? I just want to learn more about this. I am also looking for a good article on: What exactly is Cash Flow? Ways to improve cash flow at individual level and organizational level? I think it is a problem of thinking and mind sets problem. If we can change the way of spending, we can have more Cash. Robert
Improving Cash Flow - How do I improving Cash Flow? What the best way to improve it to another 100% growth YOY? Has anyone does this or achieved this using online marketing? Thanks, Roberts
Re: Which would you start: a Blog or Online Community? - It is a difficult decision to make. Lets start it this way - What are you more interested in? Money? or Friends? or Both? If its purely Money, then Blog might be an appropriate answer. But consider this - It will be people (visitors) that will bring traffic to your blog and then Money will follow. This will be possible after a time and during this time it will be your friends who will be the starters. If you are looking for friends only, then its true that not many will be interested in knowing how you have beaten them in the game or the other way round. So it will be preferable to have a Forum where they can share ideas with you and others. But you can share your insider knowledge with them and invite comments from your Blog. You can also put up information on what others (including your friends) don't know about Tennis. The blog you create can provide News, Inside Information and also Techniques that can be used by the new entrants in the world of Tennis.
Making Money in 2011 - Hello forum members! As we draw closer to the new year I thought it would be appropriate to change the title of our forum category "Making Money in 2010" to "Making Money in 2011" - I'm looking forward to some interesting discussions and wish everyone a prosperous New Year!
QuickBooks vs. Microsoft Money vs....? - I have always used Microsoft Money to run my business - accounting, invoicing, etc. It came with my computer when I got it and integrated well with my online banking system so everything is a breeze. It only takes 30-60 minutes every quarter to do the bookkeeping (keep in mind that I have a very simple business - no inventory, very little invoicing, I do all my payments by credit card, etc). Is QuickBooks or Money the best accounting tool for small business owners? Or is there something even better?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Executive Blind Spots

The State of the Sustainable Furniture Industry

How to Set Sales Goals that Work

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.