A lot of businesses get into trouble with cash flow. Even when they make a profit during the year, they have issues at certain points of the year where the cash flow isn’t sufficient to sustain the business. That leaves the business owner in the difficult predicament where they either have to choose which bills they can afford to postpone paying or with looking for a loan to carry them through until their receivables come in. Either of those two options can cost a business more in late fees or interest, hurting the future profits of the business.
So, the key is to try to smooth out the cash flow. That can be done by changing the way your business handles either accounts payable or accounts receivable and sometimes both. This excellent infographic offers some opportunities to address issues on either side of your cash flow. The ones that I plan on focusing on for my business are payment terms. By addressing the terms that I offer to my clients, I think I can speed up payment and improve my cash flow in a significant manner.
Regardless of the type of business you have, you should be able to find at least a few tips that can improve your cash flow. Give it a look, improve your cash flow and let us know which areas you think can help your business’ cash flow in the comments below.