Business owners recognize that having great sales is important, but the most crucial factor in keeping a business operating smoothly is cash flow. If all those wonderful sales can’t be converted into cash quickly, their value will be diminished, and your business could be to struggling despite the high volume of sales. Here are some tips for how you can improve your cash flow, and put your small business on a better footing.

Sell Off Obsolete Equipment

Equipment that you no longer use, or inventory which is no longer salable, has little value to your company and should be converted into whatever cash value it might have. Even the book value of such assets would represent incoming revenue, as opposed to allowing it to collect dust in a warehouse.

Put Cash in Interest-Earning Accounts

It will always be to your advantage to put cash deposits into accounts that earn interest because that’s money you’re earning without having to do anything for it. The trick to this is to avoid tying up your assets for the long term because you’re likely to need them to be more liquid. This means you should avoid long-term CDs and those which carry penalties for early withdrawal.

Offer Discounts for Early Payment

It’s a good idea to have an entire program implemented at your company for allowing discounts on early payments. This will allow you to collect cash which is owed to your company as soon as possible, so all that revenue isn’t tied up, waiting for customers to pay.

Penalize Late Payments

In the same way that early payment should be rewarded with discounts, late payments should be penalized by additional charges. Even when it turns out to be impractical to collect such late charges, if you have a program like this in place, it will at least impress upon your customers the value of paying on time rather than delaying payments.

Does Your Small Business Need Improved Cash Flow? 

As any business person knows, cash flow is the lifeblood of a business, and if you don’t have positive cash flow, your business is probably struggling. Contact us at Commercial Capital Finance so we can discuss ways that your cash flow can be improved, and your business can be made more stable.