Jordan Votes

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

• Invoice as soon as possible.
• Stop services for clients who haven’t or appear that they won’t pay.
• Require up-front partial payment when starting a new contract.
• Regularly follow up with delinquent customers.
• Late payments should incur some kind of penalty.
• Allow for credit cards payments, when needed.
• Give discounts in order to persuade customers to pay in cash. This will help move your cash flow in the positive direction.
• Set payment expectations of new customers in your proposal, contract, or welcome letter/call.

Suppliers/Expenses

• Avail yourself to any discounts offered for early payment.
• If there are no such discounts, make payments to suppliers when invoice is due.
• Inquire as to whether suppliers offer extensions on payment terms.
• When possible, make payments by credit card.
• Be sure that credit card and loan payments are made in a timely fashion to avoid interest and penalties.
• Review current expenses to see what can be reduced.
• 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 for loans for poor credit that have great interest rates and can give you an no credit check loan.
• Plan a budget to establish your long and short term cash flow 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 the mundane and use your human assets to innovate and add value.