20 steps for cash flow success


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  1. Develop a cash flow projection. Ensure you monitor and update it regularly.
  2. Have a credit policy stated clearly on your invoices of payment terms. Your accounts payable policy should be outlined at the outset of every credit relationship.
  3. Have a script for ringing late payers.
  4. Do credit checks on customers you are heavily exposed to.
  5. Monitor your customers' use of credit and adjust their credit limits accordingly.
  6. Make sure you are not paying your bills too fast while your customers are laggards.
  7. Invoice promptly, follow up regularly, cut payment terms and offer discounts for prompt payments as well as late payment penalties.
  8. Closely manage your invoice process and collections practices.
  9. Re-arrange annual payments such as insurance so you pay small instalments frequently. This will help to smooth out lumps in your cash flow cycle.
  10. Establish a deposit policy for work in progress.
  11. If you need an overdraft for business growth, get the right one.
  12. Price your products for profit and become a cost control freak.
  13. Manage your stock efficiently.
  14. Sell unnecessary equipment.
  15. Would leasing or renting equipment be better?
  16. Think about debtor financing where the bank buys your invoice at a discount, they chase the money and you get the cash early. Many big customers don’t mind this if you talk to them about it in terms of your cash flow.
  17. Get a good accountant and see him or her at least once a quarter if your business is growing quickly.
  18. Select an appropriate source of funding for your requirements and pay the debt before the interest kicks in.
  19. Use short-term cash surpluses wisely. Don't keep them in accounts that don't pay interest.
  20. Finally, make sure your bank knows how fast you are growing!

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