However, many companies are lax with their cash flow management, which is very dangerous in these days when loans are harder to come by to tide you over.
4 Ways to Improve Your Cash Flow:
- Try to do credit checks before you start up with a new customer. Folks who pay others promptly will probably continue to do so. The ones that pay slower, well you get the idea.
- Send out invoices promptly. Again, this seems pretty straightforward but I’ve seen companies wait until the end of the week or even a month before they invoice. GET THE BILL OUT QUICK and YOU’LL GET PAID QUICK!
- Improve your quality by making good parts the first time and they won’t be rejected. Seems counter intuitive but if you are not constantly, crediting and rebilling your customer’s accounts for bad parts you do make, your cash flow will improve and you won’t be wasting time doing paperwork.
- Send statements and follow-up with calls to the slowpokes. People will use your money (yes, it is yours!!!) until they want to pay. Just be firm, polite and document everything.
The bottom line is that it is up to you to get the money and you’ve got to stay on top of it and collect when you are entitled to be paid. No ifs, ands or buts!!!
Primary $Profit Power$ Point (you can use today!)
"Look at your aged accounts receivable report and start working on the 5 OLDEST and the 5 LARGEST account balances you have. If you make a determined effort to collect these monies, you will be well on your way to a better cash flow."