Are you looking for ways to enhance cash flow? Here are a few things you must start doing.
If you own a business, the sales and profits of which are growing every minute, you are definitely on the right path. But, that shouldn’t relax you enough to put your guard down. There are times when things start going a little sideways, and cash flow becomes difficult. Sometimes, payables are due before the receivables show up, and it can hurt your cash flow in a very major way. In such a situation, you might skimp on paying your dues on time, thus jeopardizing your creditworthiness. On the bright side, there are things you can do to maintain your cash flow, and enhance it with time. In this article, we shall discuss with you some ways to increase your cash flow.
Let’s break it down.
Lease Instead of Buying
This may seem a little counter-intuitive to most people because the fact is that leasing is more expensive than buying. But, if you take your mind off the bottom line, you will be able to think otherwise. However, if your business is short of cash, you will have to make arrangements that will help you manage your day-to-day expenses. Leasing enables you to pay smaller increments, which benefits your cash flow. Furthermore, lease payments are business expenses, which can be written off.
Provide Discounted Loans
Everybody loves incentives, and your customers aren’t an exception. If your customers pay their bills on time or ahead of time, you can offer them a discount on their loans. As a result, you will create a win-win situation for yourself as well as for your customers. This will encourage your customers to make their payments on time, thus increasing your cash flow.
Check Your Customers’ Creditworthiness
Sometimes, customers refuse to make cash payments. If this is the case with you, don’t forget to conduct a credit check. Remember, the credit check must take place before your customers are signed up. If you discover that your client has a bad credit history, be prepared for they might delay their payments. Such situations are detrimental to your cash flow. If you make a sale to a customer with doubtful credit, make sure you set it up with more interest.
Conduct a comprehensive inventory check. You will find out that some products don’t sell as well as others. Instead of waiting for a miracle moment, or buying more of them, just get rid of them altogether. It’s difficult to take your once best-sellers out of the equation, but it is a smart thing to do if you want to increase your cash flow.
Increase Your Prices
Most people aren’t very confident when it comes to increasing their prices. They are fearful because they believe that an increase in prices will hurt their sales. For better cash flow, one needs to be experimental enough to take calculated risks. Cash flow doesn’t increase overnight. There is a considerable amount of patience and homework on your end that fetches the results that you long for. So stay resilient, and use the aforementioned tips to enhance your cash flow.