3 Ways To Improve Your Cash Flow

As any small business owner knows, maintaining a good cash flow can make or break your business. Having a good cash flow isn’t as easy as it sounds. You will have to stay on top of every area of your business that involves cash flow. In this article, we’re going to look at ways to improve your cash flow.

1. Simplify Your Billing Schedule

The billing schedule that you have with your clients has a lot to do with the cash flow of your business. Your billing schedule should be set up with the interest of your clients in mind. Perhaps the reason why they don’t pay you on-time is that of the billing schedule that you have with them. So, try to set up a billing schedule that works best for your clients. In doing this, they’ll be able to pay you one-time and more often.

2. Stretch Out Your Payables

Take the highest possible period allotted ( usually 60 or 90 days ) to pay your suppliers. Consider these terms as an interest-free credit line from your current supplier. It will give you adequate time to collect receivables without spending money on temporary credit lines.

3. You Might Need To Change Your Prices

When was the last time you looked at your prices? Perhaps your rates are too low or high. So, it would be in your best to analyze what your competitors are charging their clients. In doing this, you’ll be able to have a better understanding of your current pricing structure. Let’s face it; sometimes it comes down to price. However, that doesn’t mean that you should set your prices too low, at the end of the day, you have to make a profit and improve the cash flow of your business.

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