Cash Flow Improvement Strategies
Strong cash flow is essential to the prosperity of any business. Many companies experience negative cash flow from time to time, but if your cash flow falters, you must take steps to improve it. Here are some strategies that can help you accomplish this.
Focus on Existing Customers
It is less costly to continue selling to existing customers than to find new ones. Reach out to customers that you already have and offer them additional products and services.
Find New Sales Methods
Besides targeting existing customers, look for new sales channels you can open. For instance, if you don’t already have one, create an online presence, and expand this presence beyond your website to social media channels. Consider collaborating with other businesses to create complimentary sales packages.
If you provide quality products and services, don’t undersell them. Your customers will gladly pay more if they realize your offerings are better than those of your competitors. Focus marketing on products and services that sell well, and trim inventory on less-desired items.
Keep Track of Accounts Receivable
When you offer credit to clients, it is crucial to keep close track of unpaid accounts receivable. As soon as customers are late paying their bills, follow up on them. To avoid late payments, provide incentives such as discounts if they pay early. Have a credit card link on your invoices to make it easy for them to pay.
Periodically review expenses and trim excess such as unused subscriptions. Buy inventory in bulk to save money. Reduce costs by leasing vehicles and equipment instead of purchasing them. However, keep in mind that upgrading equipment and investing in cutting-edge technology can save you money in the long term.
Negotiate Terms with Vendors
If you need to make major purchases from vendors, negotiate favorable payment terms. Arranging for extended payment terms will reduce the negative impact on your cash flow.
Obtain a Loan
Sometimes borrowing money is the best option to help you maintain strong cash flow. However, be sure the debt you incur is worthwhile for your company’s long-term growth.
For more advice on improving cash flow, contact Atlas Capital Solutions.