Managing Cash Flow Made Simple
5/21/2010 at 9:45 am by
As any kid with a lemonade stand can tell you, the basic principle of a successful business – or even just a functional one – is to bring in more money than you spend. So you need positive cash flow. How can you get it?
First of all, the golden rule – “do unto others…” – doesn’t work with cash flow. You should be firm about clients paying on time, but then pay your bills at the last possible moment. It’s better to keep money in your company’s possession as long as possible.
Another way to get more money in your company’s hands is to cash in on continuity sales. Continuity sales can be thought of as a contract where clients purchase services now that they’ll get over an extended period of time. This means you’ll get more money upfront.
ERP systems can also be used to improve cash flow. These tools can streamline contracts, expense approval, and payment approval so you can make decisions in real time about how and when to spend corporate funds.
Finally, it sounds simple but business owners should be penny pinchers. Check your cash flow projection before you buy items and avoid buying what you don’t need.
Getting your cash flow in order pays off – literally.





