8 Ways to Improve Your Businesses Cash-flow

Even though we are steadily coming out of hard economic times, we still need to keep on eye on the availability of cash within a business. In fact, we should always be making sure that cash-flow is at a good level, because having cash at hand for any emergency is very important.

“It has been said that over 65% of businesses don’t have a good cash-flow and therefore risk getting in trouble”

There are many ways you can improve your cash-flow situation and in this article I would like to go through some of the best:

Lets Improve Cash-flow!

Manage Cash – One of the most obvious ways to improve your cash-flow is to actually try and have some cash. To do this, make sure that you put aside a bit of money every week/month so that you have a place where there is always some money for emergencies.

Improve Decision Making – Doing this will allow you to be more prepared for change, which in turn will allow you to be aware at what you will be spending and where your money will be going. As well as this it will hopefully save you some money on planning and making decisions, which in turn means you will have more money to use when needed.

Sell Assets – You can improve cash-flow by selling an asset to convert it to cash. As well as brining in cash this could also make you a profit, especially on something like land or property which may have risen in value since you bought it. Its recommended that you sell assets which you don’t require anymore, unless you want to use the next option.

Sell Assets and Leaseback – Much like the above, you can raise great amounts of money if you sell an asset. If you still need that asset then an option you can take is to lease it back. This will give you quick cash, but could lead to spending more in the long-term, as you will have to continue to pay each month for the asset.

Mange Your Stock – If you are a company which deals with stock, then you can improve your cash-flow by keeping a closer eye on this stock. Using a just-in-time system will improve cash-flow because you will only get the amount of stock you need, when you need, instead of having to pay large amounts of money on stock which you may not even be able to get rid of.

Manage Debtors and Creditors – When you are managing a business you will have people who owe you money, especially if you run credit systems which allow people to pay late for their purchases, and you will have people you owe money to. To try and improve cash-flow you need to get people who owe you money to pay it to you quicker, as it is then in your bank account, generating you money. You also need to get people you owe money to, to accept long payment deals so that you can keep your money for longer, again meaning you can make more money of it.

Get a Loan – An option which you should only use if you really are in trouble is to get a short-term loan which should help bring in the much needed cash. You will need to pay this back however, so make sure that the money you are borrowing not only gets you out of the mess, but it also works for you and makes you the money to pay the bank back.

Bank Overdraft – Setting up an overdraft will allow you to always have cash at hand if you need it. As well as this it is flexible and you only pay for what you borrow. The problems? Interest will be high and you will have to pay the money back quite quickly.

These 8 ways to improve your cash-flow all have advantages and disadvantages but if you are in the need of quick money you should do whichever suits your business the most.

If anyone has any more ways to get quick cash for a business, please mention it in the comments section.

Image – Neda River by Artandmale