Earth Friendly Construction

Handling cash flow can be difficult for many startups, small businesses and households. Cash flow problems occur for many different reasons and can have a significant impact on the well-being of a business or household finances. The following are 20+ tips to help improve cash flow (mostly for businesses) in the short term:

Receivables/Customers

• Send invoice as quickly as posssible.
• Suspend services for clients who haven’t or appear that they won’t pay.
• Request deposits at the start of contracts if possible.
• Regularly follow up with delinquent customers.
• Charge a fee for late payments.
• Accept credit cards for payment, if necessary.
• Provide discounts to incentivize customers to pay in cash. This will help move your cash flow in the positive direction.
• Set the payment expectations of new customers with a welcome letter.

Suppliers/Expenses

• Make use of discounts offered for early payment.
• If no discounts are offered, schedule payments for when invoice is due.
• Find out from suppliers whether payment terms can be extended.
• Where possible, make payments by credit card.
• Ensure that credit card and loan payments are made on time to avoid interest and penalties.
• Reduce current expenses wherever possible and revisit regularly.
• Change suppliers to reduce costs whenever possible and appropriate.

Other

• Sell excess inventory to generate cash.
• Stop carrying the portion of your inventory that takes the longest to sell.
• Reduce or delay salary to owners until cash flow improves.
• Start a line of credit with your bank. There are many institutions you can go to if you have poor credit that have great interest rates and can give you an no credit check loan.
• Create a budget to identify your short-term and long-term cash needs.
• Taking out short-term loans: Loans from various financial institutions are often necessary for covering short-term cash-flow problems. Revolving credit lines and equity loans are other types of credit used in this situation.
• Automate repetitive tasks and use personel for innovation and adding value.