In times of a slower economy and when growth is difficult to sustain it is important to stay on top of the company’s finances and to preserve cash.
Here are some ideas to maximize cash availability in the business.
1. Track Cash
Track your cash as it comes in and goes out throughout the month. That will help you stay on top of problems and make adjustments, such as delaying discretionary payments.
2. Work with customers and suppliers.
You can increase cash flow by offering discounts to early paying good customers and preserving cash by having suppliers help by extending payment terms.
3. Protect working capital.
If cash is tight don’t pay for long term investments in equipment. It is better to use debt to finance these projects. Debt can be used to re-finance fixed assets to free up capital.
4. Cut waste.
Make every effort to improve productivity, eliminate inefficient equipment and other sources of waste. Engage staff to get involved in developing solutions.
These are just a few suggestions to improve that most vital business tool – cash flow. I hope you agree.
gerry@polarisgroupmc.com
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