Cash flow is the lifeblood of every business, and it’s generated by product sales, accounts receivables collections, and the sales of assets. And the goal of good cash flow management is to be sure to have enough cash on hand in order to meet your financial obligations. Below are some basic yet key tips on how to protect your cash flow and keep it healthy.
Keeping an eye on things
You can increase your cash flow by reexamining your billing, collections, and payables systems and performing whatever changes are necessary to make sure everything is functioning optimally. No matter whether you’re a large business, a small business or a solo entrepreneur, one of your most critical goals is to get your customers to pay on time.
When possible, require an up-front deposit for all sales. However, if you make sales on credit be sure to stay on top of the account, bill promptly, maintain regular communication (but don’t be a nuisance), and diligently follow up on all past due invoices.
To encourage quicker payments on invoices, consider offering discounts for early remittance. You may also want to offer alternative payment options such as credit card or electronic funds transfer.
Diligence is key
For overdue accounts it is critical you do not fail to pursue them (though make sure to do so professionally and with respect). If your collection policy is lax, then you stand to lose revenue. Also be aware that the longer a balance is allowed to go unpaid, the less likely it is that you’ll ever see full payment.
The Jayaram Law Group routinely and successfully assists its clients in their business-to-business (b2b) collection needs. We take pride in obtaining payment on accounts receivables without fracturing critical business relationships or engaging in time-consuming and costly litigation efforts.
If you need business debt collection services conducted in a professional manner, contact our B2B (business-to-business) debt collection law firm by calling 312.454.2859 or visiting www.jayaramlaw.com.