Profitability & Cashflow- The Keys to a Successful Business

30+ Ways of Improving Cash Flow

1. Increase cash sales as a percentage of overall sales.
2. Reduce direct and indirect costs and overhead expenses.
3. Defer discretionary projects which cannot achieve acceptable cash paybacks (e.g. within one year).
4. Increase prices especially to slow payers.
5. Review the payment performances of customers – involve Sales Reps in the collection process.
6. Implement more selective credit terms.
7. Seek deposits or multiple stage payments.
8. Reduce the amount/time of credit given to customers.
9. Invoice as soon as work has been done or order fulfilled.
10. Improve systems for billing and collection.
11. Use the 80/20 rule to control stocks, debtors and suppliers.
12. Improve systems for paying suppliers.
13. Generate regular reports on debtors aging and collection status.
14. Establish and adhere to sound credit practices – train staff properly.
15. Use more pro-active collection techniques.
16. Add late payment charges or fees where possible.
17. Increase the credit taken from suppliers.
18. Negotiate extended credit from suppliers.
19. Make prompt payments only when worthwhile discounts apply.
20. Reduce stock levels and improve control over work-in-progress.
21. Sell off or return obsolete/excess stock.
22. Use invoice discounting or invoice factoring facilities to accelerate receipts from sales.
23. Defer or re-stage all capital expenditure.
24. Use alternative financing methods, such as leasing, to gain access to the use (but not ownership) of productive assets.
25. Sell off surplus assets or make them productive.
26. Re-negotiate bank facilities to reduce charges.
27. Seek to extend debt repayment periods.
28. Net off or consolidate bank balances.
29. Enter into sale and lease-back arrangements for productive assets.
30. Defer dividend payments.
31. Make medium- and short-term cash flow forecasts and update them regularly.
32. Raise additional equity.
33. Convert debt into equity.

Contact Sean Donnelly