Cash Flow Problems? Here’s How to Fix Them
Many businesses occasionally experience cash flow problems. For some, the difficulties stem from slow sales, while others struggle due to inordinately high expenses. Some companies experience satisfactory sales numbers, but their collection efforts fall short. Whatever the cause of your cash flow crisis, it is imperative that you be proactive in coming up with viable solutions. Here are some tips to help you restore healthy cash flow to your business.
Sometimes your cash flow simply needs the quick shot in the arm that a flash sale provides. If sales are strong but income still isn’t satisfactory, perhaps you need to consider raising your prices. Although you may lose a few customers, as long as you provide quality goods or services, most will stick around. If the sluggish cash flow is related to periodic slow-season doldrums, it may be time to tap into your business line of credit until things pick up again. Establish a line of credit when business is booming so you have that safety net when you need it.
Improve Collection Efforts
When sales are steady but income is sporadic, take a close look at your invoicing and collection process. Send out detailed invoices with cost breakdowns as soon as products are delivered or work is completed. Remind clients when payments are late. If your clients are habitually tardy in their payments, consider switching to a retainer-based fee structure.
Lower Your Payments
If the amount of your debt to creditors is choking your company cash flow, attempt to negotiate for lower regular payments. Creditors are often amenable to compromise to ensure that the debt is steadily paid off.
Get Qualified Help
Perhaps the employee that you have been entrusting the finances to does not have sufficient training for the task. Consider letting that person go and hiring a qualified accountant who can untangle the mess and revitalize your cash flow.
For more advice on fixing deficient business cash flow, contact Growth Lending Group.