Watching Your Cash Flow?

Did you raise enough “seed capital” or “angel investment” or “mezzanine financing” or full blown venture capital?

Exactly what stage of growth is your company at?

How good was your sales forecasting?

How tightly are your expenses being controlled? Are you bleeding the company by drawing prematurely excessive salary?

Reduce inventory to minimal acceptable levels. Consider “just in time” inventory. Otherwise you might be forced to unload unsold inventory at “fire sale” prices.

Inventory financing can be very expensive. A business is effectively penalized by the bank if the inventory offered as collateral remains unsold for too long.

Consider Equipment Leasing strategies instead of buying outright. There may be tax concessions.

Rate your customers on credit worthiness. Decide who will be given credit and for how long.

Revamp you internal Accounts Receivables Management. When the Receivables are factored, the funding source effectively becomes the Receivables Management division of the company. This saves time and expense. It allows the business to focus on sales and marketing which are direct revenue generators.

Bill more frequently – then factor the invoices for faster cash flow. This tactic works best when factoring invoices from your best i.e. most creditworthy clients.

Early payment incentives to your debtors rarely work. Factoring the invoice that you send them does. The cash can be made available within 24 – 48 hours.

© 2006 Sanjeev Aaron Williams & Cashwerks All Rights Reserved