Growing your business takes time, effort and, most importantly, working capital. There are many ways to improve your capital, but increasing your cash flow is a common way. Whether you’re struggling to pay off your debts or attempting to take on larger clients with higher upfront costs, use these tips to increase your cash flow today.
First, look for ways to increase your accounts receivable collections. Late payments from your customers can dramatically decrease your cash flow. Talk to your customers to find some common reasons that payments aren’t being sent in on time. If you find a common theme, look for incentives that will encourage them to send in payments earlier.
Talk to your suppliers and distributors about your accounts payable. If you aren’t receiving money in a timely manner, negotiate your payable accounts to avoid paying early. Instead of making late payments, talk to them about extending your payment plans to keep your cash flow positive.
While you’re negotiating, discuss your pricing for each of your contracts. Long-term contracts, particularly in bulk, should be lower than short-term pricing. If you can’t get a deal on your consistent parts and materials, consider looking for other suppliers. Don’t let loyalty to a company harm your capital.
Another popular way to increase your working capital is through financing. The right financing offers you flexible, dynamic capital that can be used to balance any cash flow issues. Look for opportunities to take on a line of credit, business credit card or small business loan that has generous terms and reasonable interest rates.
A line of credit allows you to take out financing whenever you need it. Unlike a traditional bank loan, this option is perfect for sudden expenses or varied cash flow issues. Alter the amount you need each month and only take out the exact amount necessary to keep your business moving forward. You won’t have to get approval for every expense, but once you’re approved for a credit limit you can take out the amount you need when you need it.
Don’t let cash flow issues harm your working capital and slow your business growth. Seek competitive, flexible ways to grow your business today. Negotiate contracts, compare loan options and grow your capital to accelerate your business growth. With the right tools, business partners and strategies, you won’t have to worry about missing payments or turning down lucrative clients due to cash flow issues.