This economy left no doubt that money is king, for a business income is king is more fitting. Income is how you pay your expenses and yourself so managing income needs to be a high priority for every business. In fact we consider cash flow the most important measurement, EBITDA is the product of imaginative financial engineering where cash flow is what pays the bills. Here are a few ways we improve cash flow for our clients:
Re-evaluate monthly recurring expenditures: a great way to quickly improve your cash flow is to reduce the monthly ongoing expenses of the business. Look at every item and see what can be saved by changing providers, adjusting service levels, freelancing talent, canceling expenses that haven’t paid off, & renegotiating debts and payment terms.
Manage credit much better: credit can be a great tool which allows you to pay a small fee to buy you the most valuable commodity there is, time. A good credit line can help you buy an extra 30 days or more at a marginal cost. Properly managing your credit line may protect your ability to access it, unless you currently have a credit line consider getting a single. Even an asset-based line can help ease periodic cash flow issues because they arise.
Watch for hidden fees: know the terms you agreed to & regularly review your statements to make sure you are paying what you are suppose to be. Actually big well know companies are already caught with “accidental” additional costs on their statements so review even though your at it track the changes in charges to make sure your costs aren’t rising faster than they should be.
Work in price increases: cost increases generally work best whenever they are phased in over a period of period (say 12 to 24 months). Plan out the price increases over time and most clients won’t say a phrase, you can always address individually those who perform.
Encourage your clients to pay you early: offering a small discount intended for early payment is a great way to get clients to pay you before their particular payment term your savings within accounts receivable costs can often counter any discounts given, and you make your cash sooner.
Shorten your invoicing time: the quicker you bill the quicker you get paid. A great invoicing system can quickly generate accounts and get you paid in much less time. The only way to make invoicing efficient is to systemize it; luckily a few host of tools and ways to implement a better invoicing system.
Purchase growth: a well thought out and focused marketing plan will grow your company and make long standing improvements while controlling the costs associated with applying such a plan
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