Improving Cash Flow
QuickBooks’ and other software’s A/R and A/P reports can project cash flows by calculating the timing of collections and payments. But projecting cash flows is not much help unless your collections occur on a timely basis. To improve cash flows:
- Bill customers immediately. Any procrastination in sending invoices becomes a built-in delay to receiving payment(s).
- Require or request retainers or deposits. Determine what percentage customers would be willing to pay upfront.
- Consider prompt-payment discounts. For consistently late customers, offer the discount after a certain number of timely payments.
- Require COD for consistently late payers. They may be in financial trouble, and COD eliminates the risk of extending credit.
Source: Guy McPhail, Improving Your Cash Flow, http://smallbusinessreview.com/finance/improving_cash_flow
Unseen Keys to Higher Profits
- Business and personal relationships that reflect trust. Trust reflects respect and confidence in the other person. The greater the trust, the easier it is to facilitate change quickly.
- Integrity (honesty). This is the stuff of an excellent reputation, which increases sales and expands the customer base.
- Openness to innovation. When someone does not want to hear new ideas, you get the message and act accordingly. So do employees and customers.
- Workforce Improvement. Good training improves productivity. But for it to pay off, management must show an active interest in the quality of the training and the individual being trained.
- Teamwork. Ever worked with or just talked to someone with whom you spark ideas in one another? That chemistry can occur only when employees are encouraged to work in teams.
- Accountability. Some people like army life because they are told what to do and measured on how well they do it. We all benefit from knowing what is expected of us and how well we are doing. In business, this means clearly describing the task (what is expected) and giving timely feedback (how well employees are doing).
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