Cash is king in the business world, so if you’ve got a business, then you probably want to hasten your cash flow. It doesn’t matter if you’re going to be streaming in a million in the next 3 months, if you don’t have enough money to sustain you till then, you may not even realise those earnings. What you want to do here is increase your cash flow and do it fast.
And it’s not that complicated. All you need to do is collect your receivables as fast as possible and simultaneously slow down your payables. Here’s how to do it.
Go for business credit cards
If you’re looking for a quick fix, then go for a business credit card. Such a card would allow you to pay off your vendors without necessarily cutting your account’s value for a few more weeks. Keep the card’s grace period in mind so that you don’t get to suffer from the hefty interest rates.
According to REL, top performing companies stretched payables by an additional 10 days and collected 17 days faster.
Forecast on your future cash flow
If you want to ensure you improve your business cash flow, then you need to look ahead. Projecting your future cash flow would give you a pretty good idea of what moves to make now. This is particularly important for most small and medium businesses, and companies often get blindsided by the skyrocketing costs that come with immediate growth. A growing business would need more employees, improved infrastructure and a bugger inventory, things that can end up costing the business a lot. Prior planning would enable you to know when to expect such surges in expenses and plan for them accordingly.
Improve your marketing
Improved marketing boosts your cost per lead, eventually keeping customers longer and even opening up untapped markets. If you don’t know where to start, you can hire a third-party consultant to assist you with that.
The first step is in implementing a content marketing initiative so that you can get a better idea of your customers and improve your leads. You’ll also get a better idea of another product/service to sell.
Replace old inventory
Old inventory not only takes up space, but can also slow down your business processes. Slow printers or outdated desktops for instance, may boot slower and have compatibility issues with newer technology. You should therefore get rid of such equipment. You could sell it out to get acquire some revenue for getting the new equipment.
Buying new equipment on the other hand, can prove to be expensive. Tech moves fast and you may need to start training your workers on usage of the new equipment time and again. Additionally, compatibility issues with multiple brands may occur if you don’t pick your products carefully.
That’s why leasing is the perfect solution. You can have the latest technologies and not worry about the costs of buying new equipment.
Remember, your business needs constant monitoring and tweaking, you don’t just set and forget. Determine how your money allocation procedure is and try to improve on it.