Before we return the Cash Flow Report back into the toolbox, let’s see if we can figure out how to make our cash flow better. Let’s smooth out the rough spots, and put this tool to use ourselves.
5 Ways to Improve your Cash Flow
Your McAllen virtual Chief Financial Officer can help you implement strategies like these to improve your business’ cash flow:
1. Create a Forecast
This is essential — your past Cash Flow Report should naturally be extended into a future Forecast. Add to your Forecast large upcoming expenses you plan to make in order to fulfill customer obligations. Include expected revenue growth and then track your targets over time to see if they’re realistic.
2. Change Credit Terms
Your credit arrangements with customers and suppliers should be predictable. Encourage payment plans that break large expenses down into monthly installments. Add fees to customer payments that are made later than your terms expected, and offer rebates to customers that improve their payment timing.
3. Invoice on Time
When an invoice is late, that payment or receivable has to skip a cycle, hurting your cash flow. Don’t allow your money to be locked up in delayed payments, unavailable for use when an opportunity arises. When a large order requires payments to be made far in the future, consider requiring a down payment before work begins.
4. Make Payments Simpler
Adding an online banking option for your customers should enable timely payments for your goods and services. Using direct deposit with your suppliers and employees should simplify your processing costs.
Help your teamwork efficiently by making payment systems simpler.
5.Use Technology to Manage Cash Flow
Modern financial software is helping every business operation sync up. Combine your bank account balances with your financial planning software to enable more accurate reports in less time. Use cloud-based solutions to tie multiple business fronts together, and allow monitoring of the entire operation from anywhere.
The Virtual Chief Financial Officer
All of these improvements take an experienced leader to implement. With over 40 years of combined experience, consulting with Murray & Kirchner will ensure your cash flow grows without the expense of a full-time CFO who is continually drawing a salary.
Meet with your virtual CFO today to update your cash flow strategy.