Don't Let Your Cash Flow Go Down The Drain
Source: American Express
Having more cash coming in is obviously good, but what's perhaps not so obvious is that money owed to you - which is nice to have on the books - isn't as nice to have as money in the bank. If you can find way to start it coming in faster, it's the same as opening spigot. How fast cash comes in can be improved by reducing the trade terms extended to customers, billing promptly, or requiring progress payments and deposits, reducing and preventing bad debts, making deposits quicker, and even raising new money. How fast cash goes out can be improved by asking for longer trade terms, securing long term debt to lower monthly payments, or reducing inventory or speeding up its turnover.