3 Tips on How to Increase Cash Flow in your Business

Sometimes you might not know how you can increase cash flow in your business. We’ve put together a few simple ideas which could help…

1.     Increase sales / income

• Particularly those involving cash payments. Use promotion if you can.
• Make observation of what sells best, then maximise on that potential.
• Look at the possibility of selling at a higher price point.
• Become more selective when granting credit.
• Seek deposits or multiple stage payments.
• Invoice promptly, be sure to chase non-payments.
• Add late payment charges or fees where possible.

2.     Reduce direct and indirect costs

• Use the 80/20 rule to control stock, debtors and creditors.
• Negotiate extended credit from suppliers.
• Make prompt payments only when worthwhile discounts apply.
• Sell off or return obsolete/excess stock.
• Defer or re-stage all capital expenditure.

3.     Optimise and become efficient

• Put off projects which cannot achieve acceptable cash returns in a decent time frame.
• Use reports and forecasts to understand the business.
• Ensure staff are trained and performing well.
• Use alternative financing methods, such as leasing, to gain access to the use (but not ownership) of productive assets.
• Negotiate payable fee’s or contract obligations.

We hope the above tips have given you more of an insight into how you can increase your cash flow. If you need any further advice please do not hesitate to get in touch with us.