4 ways to improve your cash flow

  • Anil Kanda
  • 13 Apr, 2015

Maintaining a healthy cash flow is critical to business survival. Many profitable businesses collapse because they run out of cash to pay the bills.

Here are four ways to free up cash in your business

1.Build relationships with suppliers Speak to your suppliers and ask for discounts if you make early payments or request staged payments so you can ease the cash flow over the month.

2. Manage stock levels having too much stock means that cash is tied up unnecessarily and extra costs may be incurred for storage – cash that could be used for other purposes. Reconsider your strategy – perhaps it would be better to order smaller amounts but more frequently? This also ensures you can update stock without waste.

3.Lease equipment rather than buying large purchases drain cash from the business, whereas leasing spreads the cost. It also makes it easier to update or upgrade it when required.

4.Raise money against invoices outstanding invoices are a business asset. By using an invoice finance specialist, you can release the cash immediately without having to wait for customers to pay you. You will receive a percentage of the invoice value on day one. The invoice finance company will also handle credit control so you do not have to worry about checking customers have paid and chasing outstanding debts. It’s a cost-effective way to run a sales ledger without employing a credit controller.