Tips for managing your cash flow…
Most businesses experience slow cash flow at some point in time. Knowing how to prevent or handle this situation can be a challenge for even the savviest business person. Here are some tips to help navigate through these choppy waters:
- Before doing business with a company check a potential customers credit references ahead of time. Have a thorough understanding of a potential customer’s businesses finances so you can find out the risk before, not after you are trying to collect on an invoice. Have the potential customer fill out a credit application and ask for bank and trade references.
- A business is not going to get paid until they invoice so bill sooner rather than later. On average companies are paid 45 days from the date they provide a service or deliver a product.
- Specify the payment terms boldly on your invoice. Typically standard payment terms are net 30 days but for some industries, terms can be as little as net 10 days.
- Don’t be afraid to ask for your money.
- Take advantage of programs and services designed to help with slow cash flow such as factoring. For a small fee factoring companies can provide cash up front for creditworthy invoices so companies don’t have to wait to be paid for their service or product.
American Receivable Corporation www.americanreceivable.com is an expert in small business finance. They provide financing programs for companies experiencing cash flow problems. For over 35 years they have helped businesses large and small find solutions to their financing needs.