Strong cash flow is essential for the success of any business. Not only does it help you pay your bills and the salaries of your employees, but it also boosts productivity and fosters further growth by enabling you to upgrade equipment, purchase inventory, and take on additional personnel.
Here are some tried and proven strategies for increasing company cash flow.
Invest Spare Funds
If business goes well and you earn some extra cash, put it into interest-earning accounts. Savings accounts that earn interest keep the funds easily available, but if you can spare the excess cash for awhile, consider placing it in higher-yielding money market accounts or other investment options.
Make Use of Unneeded Assets
Consider converting excess inventory, computers, furniture, and other equipment into cash by selling these items online or at specialty auctions. If you have unused office space, increase your cash flow by selling or leasing it.
Conduct Negotiations With Your Vendors
You may be able to negotiate more favorable terms with suppliers and service providers with whom you have had long-term relationships. You lose nothing by suggesting better terms with your vendors, and if you save even a small amount, you can use it to fuel further company growth.
Factor Your Invoices
Invoice factoring ensures steady cash flow for businesses with slow-paying clients or clients with long terms of payment. Unlike the process of acquiring traditional bank loans, which can take months, applying for and receiving funds from invoice factoring is swift and easy. It works well even for new startups, because the factoring company is more concerned with the creditworthiness of your clients than your own credit score. Additionally, factoring is a debt-free form of financing, because the factoring company purchases your invoices and then takes over the process of payment collection from your clients.
For more advice on increasing business cash flow, get in touch with Avery James.