Home
>
Small Business
>
Eight Ways To Improve Your Companys Cash-Flow ? TODAY!

Eight Ways To Improve Your Companys Cash-Flow ? TODAY!

Cash is the lifeblood of any business. As humans need air to breath and food to eat, your business requires customers that provides the primary substance that keeps a business in business: cash.

But in the real world, businesses that invoice their customers for payment can face a challenge in getting paid, especially when the customer may be another business or a government agency. Somehow the terms "NET 15, NET 30 or DUE UPON RECEIPT" seem to go unnoticed by the customer and the invoice doesn't get paid until 60 to 90 days after the work has been performed. In other cases, the invoice may be paid after 120 days ? if not paid at all. For the seller, this can be the start of cash-flow challenges, which can rapidly escalate into a crisis.

In spending over 10 years working to help turn around financially troubled businesses, I have found that the key to better cash-flow is to ensure that the business implements a system to get their receivables paid quicker and faster, with less pain for the customer.

Here are eight ways to start improving a company's cash-flow today:

1. Give a Discount for Paying the Invoice Before the Due Date: Offer an additional percentage off or maybe a fixed dollar amount off of the total invoice if they pay within 5 days of the invoice date. This strategy works well because it provides a win-win situation for you and your customer. If they pay before the due date, they will save some additional money and you will be paid a lot faster. If they do not take advantage of your generous offer, they will be responsible for the balance owned. It also helps keep good customers because you have provided an incentive for them to continue to do business with you.

2. Have an Internal Collections System In Place: More often than not, a small business will focus so much on acquiring the client and performing the work that it doesn't dedicate as much time and effort to collect payment. Make sure you send your invoices out immediately upon completion of your work or shipping of your product. If you have the resources, have your staff send a friendly email reminder or make a phone call ten days before the due date (if it's a Net 30 or more term) to the customer reminding them to make payment.

3. Accept Credit Cards: One of the simplest ways to increase cash-flow is to accept credit cards. Once the charges are made, the money is transferred to your account, usually by the end of the business day, or in some cases, instantly. Studies have shown that people and businesses will spend more using a credit card than they will with cash. Offer your customers the ability to pay their invoices via credit card and your sales will increase. Because there are thousands of credit card processors in the United States, you are in a position to compare and negotiate processing rates and equipment rental fees.

4. Accept Checks By Phone, Fax and the Web: This is a very easy way to have your customers pay, with little hassle. There is inexpensive commercial software available for purchase which will allow you to create a check from your printer, based upon a check that your customer faxed to you, or gave to you over the phone. Also, there are online services available which will allow your client to "write" a check over the internet, email it to you and then you can print it and deposit it to your bank account. This is especially a great tool to use to improve cash-flow because while it reduces the wait time for receiving payment, it also reduces the time for the bank to clear the payment if it is drawn on a non-location bank.

5. Consider Accounts Receivable Financing/Factoring: The process is simple: when a company sells a currently due invoice from a credit-worthy business customer to a third party (The Factor) in exchange for getting that money today. The factor advances a certain percentage of the total amount of the invoice and holds a percentage in reserve. When the customer pays the invoice, the factor releases the reserve, less the agreed upon fee (discount rate). With factoring, your company's credit is not evaluated -- your customer's credit is. Factoring can be used as temporary or alternative financing for many businesses. Traditionally, manufacturing companies used this form of financing but today factoring is available to many other companies ranging from construction, import/export, distribution -- even companies that provide services to government entities.

6. Consider Purchase Order Funding: If your businesses provides services to other companies that require purchase orders, you can secure short term funding to be used to finance the purchase or manufacture of specific goods that have been pre-sold by you to your credit-worthy customer. This type of funding entails issuing letters of credit or providing funds that allow clients to secure the inventory they need to fulfill customer orders. This frees up existing cash that your business has on-hand for other use.

7. Have a Referral System: Word of mouth marketing is the most powerful and cost-effective way for a business to acquire new clients. People like to do business with those they like and trust; the same is true for businesses. You need to have a referral system in place with your existing customers, business partners and even your employees to help them to refer you business. A great book that will show you how to develop a word-of-mouth based marketing and referral system about this is The World's Best Known Marketing Secret by Ivan Misner, Ph.D., who is also the CEO and Founder of BNI (Business Network Int'l) , the world's largest business networking and referral organization.

8. Create a Rewards Program: Almost every major business ? from supermarkets to office supply stores to credit cards? has a rewards program. Some offers discounts to its customers in the form of a credit towards a future purchase, or special product incentives (i.e. buy one get one free) or in some cases even cash-back. You can create your own rewards program as a way to retain and reward customers who pay their bills on time or ahead of time. The cost is minimal to your company and results in future, higher value purchases with an increased frequency, and customer loyalty. You can also implement a rewards program as part of your referral system.

By implementing some or all of these strategies, you can help ensure that the cash keeps flowing and your business remains a viable entity.

Timothy M. Houston is the President of Houston & Associates, a commercial debt management and business consulting firm based in Staten Island, New York with affiliated offices in Texas, California and Florida, (http://www.houstonandassociates.com). In 2005, Tim launched SmallBizSaver.com (http://www.houstonandassociates.com) which is dedicated to helping small businesses to stay in business.

one time home cleaning Morton Grove ..

In The News:

The Berkeley Humanoid Light (BHL) is a lightweight, open source humanoid robot that anyone can build using 3D-printed parts and off-the-shelf components.

Meta’s new AI chatbot is getting personal, and it might be sharing more than you realize.

A new threat targets both Android and iPhone users: SparkKitty, a powerful mobile malware strain that scans private photos to steal cryptocurrency recovery phrases and other sensitive data.

Thanks to a team at the University of California, Davis, there's a new brain-computer interface (BCI) system that's opening up real-time, natural conversation for people who can't speak.

Privacy risks are hiding in plain sight, as your personal data is likely being collected, tracked, and sold without your knowledge.

VenHub, a fully autonomous, AI-powered smart store just opened at the LAX/Metro Transit Center in Los Angeles.

A woman's Facebook account takeover reveals dangerous social engineering tactics and provides lessons on recovery, avoiding scams and enacting stronger security measures.

Shanghai engineers are using 432 walking robots to relocate a complex, preserving Shikumen architecture while creating space for a modern underground hub and cultural center.

Major healthcare data analytics firm Episource had a cybersecurity incident exposing 5 million patients' medical records and personal information in recent breach.

A new sophisticated PayPal scam sends legitimate-looking emails from official PayPal addresses, using phone numbers instead of links to convince victims to download remote access tools.

Fox News' AI Newsletter brings you the latest on this rapidly evolving technology.

The innovative Kara Pod device extracts moisture from air to create mineral-rich water and brew coffee, featuring UV sterilization and compatibility with Nespresso pods.

Gov. Hochul unveiled New York's nuclear power plant project to power a million homes, which faces permit challenges while promising jobs and a cleaner energy future.

SAFE introduces Aerie, an underground luxury bunker combining high-end living with advanced security, wellness amenities and interactive walls simulating panoramic views.

A Facebook scammer posing as Elon Musk tricked a victim with promises of a Tesla and $250,000, requesting gift cards that become untraceable once the codes are shared.

Experience hands-free golfing with the Robera Neo smart caddie that uses AI to follow you, navigate obstacles and carry your clubs with GPS course mapping.

Cybersecurity alert: 16 billion passwords exposed in massive credential database affecting major platforms. Protect your accounts with password managers

The innovative BeBot robot uses electric power to remove pollution from shorelines, covering 20-30 times more area than manual collection while preserving wildlife.

A new ClickFix campaign targets macOS users with fake Spectrum support sites, tricking victims with CAPTCHA failures to paste commands that install information-stealing malware.

AI-powered autonomous trucks from Plus Automation are being tested across the U.S., Europe and Asia to solve logistics challenges while facing regulatory hurdles and labor concerns.

Your health information might feel private and secure with your doctor, but the reality is far more complicated. Data brokers collect a wide range of sensitive health data, from diagnoses and prescription details to personal identifiers, and sell this data to marketers, insurers, and other third parties.

Kepler Robotics has officially introduced its Forerunner K2 "Bumblebee" humanoid robot at the SAIC-GM automotive plant in Shanghai, marking a significant moment in the real-world deployment of advanced robotics.

Scammers never seem to be running out of new ways to try and get their hands on your money – and lately, they've been getting sophisticated.

Thirty people were injured and killed, though the exact number remains currently unknown, when a suicide bomber blew himself up in a Damascus church.

Unexpected password reset alerts signal potential hacking attempts or phishing scams. Learn how to respond and establish stronger security measures for your accounts.

Eight Ways To Improve Your Companys Cash-Flow ? TODAY!

Small Business