3 simple things you can do to improve Cash flow:
- 1st – get paid faster! If your customers are paying on average in more than 30 days, implement processes that will reduce this delay.
- 2nd – reduce inventory on hand! How much, and how long you hold inventory ties up Cash. Do this, and you’ll free up significant amounts of Cash.
- 3rd – stretch your payments to suppliers! Negotiate longer terms with your suppliers, or better yet, pay them contingent upon you being paid by your customers.
Focus on these 3 behaviors and your company will have more money!
Congratulations!… you’re now managing Cash!
Hope this helps you understand some basic dynamics of managing cash. If you would like to talk further give me a call.