It would be hard to imagine a small and mid-size business which had never suffer from cash-flow shortage. One can even say that it can be business owner’s big \u201cenemy\u201d.<\/p>\n
Recurring to credit, or even adopting a more complex solution like raising capital, can work in short term, but it won’t resolve cash-flow problems by itself. <\/p>\n
Growth sales can even increase the cash-flow problem. That’s why a sometimes delicate balance between growth and cash-flow much be achieve in order to keep business afloat and healthy.<\/p>\n
So, what can one do in order to improve the cash-flow management?<\/p>\n
Here are three steps one can take:<\/p>\n
Improve the collecting of receivables<\/u><\/strong>\u2013 This seems the most obvious solution, but its application it’s far from being an easy one. One must always remembers that on the other side is also a business to run, and it might want to delay payments in order to improve its own cash-flow. <\/p>\n A Balance between both parties must be achieved. <\/p>\n Offering discounts as a front or fast payment might be a possibility in times of stress, but that should be a onetime offer. Otherwise the client might come back for more, and a business available for discount is never a good label. <\/p>\n Increase sales<\/u> \u2013 Easy to say than done, increase sales are most of the times a taught task in the competitive environment most business operate. Furthermore it might just increase ones accounts receivables and not improve the cash-flow, if these sales are done on credit.<\/p>\n One’s purpose should be to increase sales on existing products, ones who have a good margin, in order to keep tight the costs of sales, and if possible the sales effort should be on the already existing clients.<\/p>\n Tightening credit requirements<\/u><\/strong>\u2013 Most of the times its results are delayed in time. A proper diligence beforehand to the acceptance of each customer will have a long impact on the cash-flow statement. Clients, most of the times, do have several suppliers, so a check reference it’s a valid and sometimes affordable tool. Getting a credit agency report is also valid. <\/p>\n In conclusion, when a company’s cash-flow is strong and healthy, it can itself committee to its stakeholders in a proper way, and create added value to all.<\/p>\n One should also make sure that sufficient cash is available for investment when necessary. <\/p>\n Rui Carrilho, Auren Portugal<\/strong><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" It would be hard to imagine a small and mid-size business which had never suffer from cash-flow shortage. One can even say that it can be business owner’s big \u201cenemy\u201d. Recurring to credit, or even adopting a more complex solution like raising capital, can work in short term, but it won’t resolve cash-flow problems by itself.<\/p>\n","protected":false},"featured_media":12209,"template":"","meta":{"_acf_changed":false,"_improvement_type_select":"improve_an_existing","_thumb_yes_seoaic":false,"_frame_yes_seoaic":false,"seoaic_generate_description":"","seoaic_improve_instructions_prompt":"","seoaic_rollback_content_improvement":"","seoaic_idea_thumbnail_generator":"","thumbnail_generated":false,"thumbnail_generate_prompt":"","seoaic_article_description":""},"global-blog-category":[],"class_list":["post-105052","global-blog","type-global-blog","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\n