12 Overlooked Strategies to Boost the Cash Flow of Your Business By Salim Omar, CPA At Isnare.com Ezine Articles

Did you know that you are likely overlooking simple ways to boost the cash flow of your business? In any business, and in particular small businesses, cash flow is king. Cash flow is directly linked to the profit of a business and bottom line, to your pocketbook. Consider the following 12 strategies as possibilities to boost the cash flow of your business.

1. Speed up Your Accounts Receivable Process - One of the largest issues for many small business owners is the length of time that it takes for their accounts to pay for products and services. Send invoices immediately, consider shortening your payment terms to 30 days from receipt and consider offering a percentage discount for early payment.

2. Encourage Credit Cards - Credit card payments from customers can speed up the payment cycle for your products and services and can also be taken at the same time as shipment or delivery of goods. Also, you may be able to reduce the incidence of any insufficient funds checks from customers or bad debt due to non-payment.

3. Leverage Interest - For any cash assets that your small business currently has, consider leveraging a high interest savings account so that you can earn money on your money while it is not in use.

4. Offer Incentives - Consider offering incentives for re-orders or consistent orders on a monthly basis i.e. refill programs, as this will ensure that you have regular, repeat business without having to spend the time or energy contacting customers for additional sales.

5. Regular Price Increases - You would be surprised at how many small business owner forget to increase their prices regularly, causing them to actually lose purchasing power when the effects of inflation are taken into account.

6. Negotiate Vendor Contracts Regularly - Be sure that you are re-pricing all of your purchases from vendors at least semi-annually to ensure that you are getting the best available prices. You can be sure that they will not contact you when their prices decrease.

7. Amortize your Expenses - Consider leasing equipment instead of buying it so that you can amortize the depreciation on your annual taxes.

8. Efficient Inventory - Don't keep more inventory around than you need. Tighten your ordering system to cut costs.

9. Monitor Your Receivables - Always be on top of the money that is owed to your business. This one definitely seems like common sense, but you would be surprised at how many business owners let money that they are owed fall through the cracks on a monthly basis.

10. Push the Limit on Your Payables- Keeping in mind that business is business, push your payables out as much as possible so that you can hang on to your valuable cash.

11. Reduce Interest Payments - When possible, use long term debt instead of short term debt. Seek interest on debt that is helpful, interest that you can deduct on your annual tax returns. And, evaluate your interest payments regularly to ensure that you are paying the lowest rates possible.

12. Fee Free Banking - It is just silly to pay fees anymore for regular banking, especially with the number of banking institutions willing to offer fee free accounts. While this seems like nickel and diming, you would be surprised how much $5 here and $10 there can add up over the course of a year.

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