Here's the second big-picture strategy from my save your business list:
2. Improve your cash flow.
Having enough cash flow to pay your bills can include spending less (cutting overhead and office expenses, reducing employees' hours or benefits, moving to a cheaper location, or selling pricey equipment) and bringing in more cash (giving a discount for prompt payment, stepping up your collection efforts, or getting customers to help you get rid of some inventory).
2. Improve your cash flow.
Having enough cash flow to pay your bills can include spending less (cutting overhead and office expenses, reducing employees' hours or benefits, moving to a cheaper location, or selling pricey equipment) and bringing in more cash (giving a discount for prompt payment, stepping up your collection efforts, or getting customers to help you get rid of some inventory).
A recent article on about.com had some good ideas on improving cash flow and collecting accounts receivable faster:
- Don't wait until the end of the month to send invoices.
- Ask for partial payments (break a job up into phases so you can bill earlier).
- Give your customers or clients a discount for paying early.
- Make calls on accounts receivable regularly.
- Pay bills only when they're due.
This last one I agree with only to an extent. As I talked about in a prior post, if you're not hurting for cash, paying a bill a few days early can benefit you in several ways, even if you don't get a discount.
