Top 35 Ways to Improve Cash Flow
- Increase sales (particularly those involving cash payments).
- Increase prices especially to slow payers.
- Review the payment performances of customers with sales force.
- Become more selective when granting credit.
- Seek deposits or multiple stage payments.
- Reduce the amount/time of credit given to customers.
Costs & Systems:
- Reduce direct and indirect costs and overhead expenses.
- Use the 80/20 rule to manage inventories, receivables and payables.
- Improve systems for billing and collection.
- Invoice as soon as work has been done or order fulfilled.
- Generate regular reports on receivable ratios and aging.
- Establish and adhere to sound credit practices – train staff.
- Use more pro-active collection techniques.
- Add late payment charges or fees where possible.
- Improve systems for paying suppliers.
- Increase the credit taken from suppliers.
- Negotiate extended credit from suppliers.
- Use barter to acquire goods and services.
- Make prompt payments only when worthwhile discounts apply.
- Reduce inventory (stock) levels.
- Improve control over WIP (work in progress).
- Sell off or return obsolete/excess inventory.
- Defer or re-stage all capital expenditure.
- Sell off surplus assets or make them productive.
- Enter into sale and lease-back arrangements for productive assets.
- Use leasing etc. to gain access to the use of productive assets.
- Defer projects which cannot achieve acceptable cash paybacks.
- Use factoring or discounting to accelerate receipts from sales.
- Re-negotiate bank facilities to reduce charges.
- Seek to extend debt repayment periods.
- Net off or consolidate bank balances.
- Defer dividend payments.
- Raise additional equity.
- Convert debt into equity.
- Make medium- and short-term cash-flow forecasts – update regularly.