Who can argue against having more cash in the bank?More cash = more options. More options = less stress. Less stress = better choices. Better choices = better success. Better success = more cash….and around it goes.
You know the funny thing is those who say things can’t be done are so right. They’ve proved it.
Those that believed that things could be done were right too. They’ve also proved it.
I know which line of thought I would rather go down.
Just think about this for a second, very rarely will you meet a real achiever who tries to tell you how to do things. Why, because they understand the potential that lies in each one of us to give something a go. They’ve generally written their own rule book and it worked.
So, what has that got to do with improving your cash flow? Absolutely nothing but I just wanted to give you a boost of encouragement this week.
So right, cash flow… an area where there aren’t as many choices. Here are our 5 RightWay tips for better managing your business cash flow.
Do these and YOU WILL have more cash available!
- Perform a good forecast – most things are predictable if you spend the time working it out. Sit down with your accountant (or get a better one if they’re no good) and do some good forecasting of where your cash is going over the next few months.
- Evaluate your customer terms – if you are paying people 20 days after they invoice you and your customers are paying you 40 days after you invoice them, then that equals a big gap that you have to fund. If you fund it then that’s less cash for you. Tighten up your payment criteria.
- Enforce payment – come on harden up guys. If people haven’t paid you then they either genuinely can’t (and you shouldn’t sell them stuff) or they’re taking the mickey. Tell them there are perfectly good banks out there that love being banks and last time you looked you’re not one of them. It’s great being charitable, but recall what I said in another article. Don’t confuse business from charity! To be good at both requires not confusing the two.
- Turn over your stock quicker – you either sell stuff or you sell time (services). Either way don’t let it just sit there. Turn it into cash quicker. Look at your badly performing inventory lines and get out of selling them. So much money can be tied up in slow moving stock. The same principle applies to people selling services. Just get your invoicing done quicker. I know so many tradesmen who take forever to get their invoicing out. What’s wrong with sending immediately after the job has been done?
- Make cash a priority – if you don’t then it won’t just look after itself. Cash is King in a business so make sure it gets to be treated like a King. Give it your best attention. Put some focus into how to turn your hard work and effort into more dollars in the bank.
Get those things right and you’ll have more cash around. That should help put a smile on your face.
More cash = more options. More options = less stress. Less stress = better choices. Better choices = better success.
Better success = more cash….and around it goes.