Got Cash? Here are a few quick strategies to jump start cash flow when the going gets tough.
- Hit your Accounts Receivable list hard. You look great on paper and sales are through the roof…so where’s the cash? Take a look at your open invoices and make some phone calls. Reach out to customers on account. Institute a late fee or offer a discount if invoices are paid before they’re due. Utilize technology to collect quickly. Review your terms: do you need to decrease them or be paid up front? Net 30 is great for your customers, but it can be terrible for cash flow.
- Stretch your Accounts Payable to the limit. Do your vendors offer Net 30? Are you taking advantage of their terms? Paying your bills upon arrival isn’t always the best use of your money. Look at your payables and push them out as far as possible without incurring finance charges.
- Credit Cards/Lines of Credit. Call the bank! Many businesses choose to utilize credit cards or lines of credit for short-term cash flow assistance. Caution – be militant about repayment. Once cash improves, pay debt down quickly to ensure minimal interest expense and avoid accumulation.
- Cut Expenses. Grab the scalpel and start slicing. Review financial statements to see where money is being spent unnecessarily and remove it! Start with larger expenses and work your way down. Don’t ignore small expenses – they add up.
Once the cash is flowing, place safeguards to ensure droughts rarely reoccur. Create a budget, perform cash flow projections, or strategize with a professional.
Word count: 261 words
See inside February 2017
The Road From Lacerte® to CCH Axcess™: “Cloud is a Magic Word”
Frank Stitely takes his tax practice seriously. As one of two partners at Stitely & Karstetter, a CPA firm based in Chantilly, Virginia outside of Washington DC, he has his eye on the future as he looks for ways to attract younger clients and utilize the
Bank Reconciliations At a Glance and Tips for Success
One of the biggest challenges of reconciling a bank account, particularly one with lots of transactions, is combating the “blur.” As you compare the many numbers and columns on your statement to the reconciliation window, it won’t take much for your ...