Is Your Cash Flow Headed in the Right Direction?
Even the strongest growing companies can experience cash flow problems. In our current state, the pandemic has only amplified how critical the nature of effective cash flow management is to the longevity of a business.
Paying bills and employees on time is a must! Maybe your receivables need a boost? Consider a prompt payment discount. Do you take electronic payments? This may improve your cash flow situation. If you are a custom job shop, do you request a deposit before you start the work or order parts required for the job?
Some companies opt to lease supplies, equipment and real estate to improve your cash flow and reduce their tax bill; however, keep in mind this can cost more in the long run. To keep funds moving in a positive direction, be careful to whom you extend credit. You are not doing your customers any favors if you allow them to overextend their own means. For you and your customer’s sake, do not hesitate to change the customer’s terms to COD or credit card, if the situation warrants such an approach. Remember these terms carry an additional fee for both you and the customer.
On February 24, hear from our resident expert Mike Perfetti, our SW Regional Director, who has over 20+ years banking experience and has seen his share of financial do’s & don’ts. As part of our SEWN Series, he’ll give a brief 10-minute presentation on his 8 Ways to Manage Your Cash Flow.
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