Yes, I know you’re finding it more and more difficult making collections, imported supplies cost more and GST refund is not fast enough …
Obviously, all this puts pressure on your cash flow. And we all know, cash flow is the life blood of any business.
So, in this issue, here are some idea joggers for you to improve your cash flow – treat it as a checklist. Some may work for you, some may work for others …
- Set specific targets for your days’ receivables, your days’ payables and your stock turns
- Set par levels before ordering more inventory
- Carefully project inventory needs
- Try to increase Cash Sales
- Send out invoices immediately
- Send out past-due notices after 14 days, not 30.
- Develop a Receivables follow-up System
- Explore hiring a factoring firm
- Hire a collections agency for seriously overdue accounts
- Offer special sales on slow moving /obsolete stock
- Phase out items that aren’t selling or aren’t profitable or aren’t leading to other sales
- Offer bulk sales to increase inventory turns
- Take a down payment on all financing deals
- Send all invoices accurately the first time
- Never let perishable inventory reach expiry
- Appoint one person accountable for payment due.
- Appoint one person accountable for tracking inventory levels and turns
- Be polite and friendly during follow up
- Look at sourcing debt, investment capital or financing
- Weed out or reduce trading with slow-paying customers
- Find new vendors with more flexible payment terms
- Update your cash flow projection weekly / monthly
- Review your Receivables report everyday for overdue accounts
- Find creative ways to get customers in slow or down times
Now time to implement. Drop me a line to let me know which is your favorite – would love to hear from you.