Cash Flows Strategy:
“Money In / Money Out” Safeguard

How you maintain control of cash flows will determine whether your business survives, especially in uncertain times. To protect financial security, try widening the gap between money in and money out. Keeping more liquid cash improves business capacity. You have more working capital with which to work, save and invest.

Being your own boss is irreplaceable. Your business awards you quality of life, a sense of well-being, and the pride of ownership and accomplishment… Benefits you cherish.

Strategic management of cash flows can support this livelihood. And quite frankly, help you to avoid having to close shop or file bankruptcy.

Effective “Money In / Money Out”
Cash Flows Security Measures

The secret to cash flow management, and maintaining positive cash flows, is that…

You must get control of both sides of cash.

Money In = Cash Inflows (Revenue)

Maximize receipts flowing into your business. Two ways are:

Increase Receipts.

Raise prices. Conduct a competitor analysis. Advertise the unique benefits and value that you offer to customers.

Collect unpaid receivables from credit customers. Push for full payment, agree on settlements, or hire a collection agency to handle problems.

Expedite Receipts.

Get full payment in advance. Free yourself from the stress of receivables.

Collect partial payment up front. If you feel comfortable giving options to make the sale.

Invoice immediately. If you sell on credit, email the invoice asap… As soon as the product or service transaction is complete.

Reward customers for paying invoices faster. Offer a discount for payment within a short window. Like 5% off for payment in 10 days. It’s a win-win.

Money Out = Cash Outflows (Expenses)

Minimize disbursements flowing out of your business. Two ways are:

Decrease Disbursements.

Trim the fat. Eliminate things you don’t need. Got an unused Shopify store that’s depleting cash monthly?

Reduce monthly, quarterly and yearly expenses. Negotiate discounts from current suppliers, especially for larger purchases. Get price quotes and deals from other suppliers. Think… In what ways can you lower utilities usage? Is there a cheaper insurance that satisfies business needs?

Minimize inventory. Limit the items you buy. Avoid holding stockpiles that can become obsolete or unsellable over time. Buy from a just-in-time (JIT) supply chain upon customer request. This strategy lessens the need to warehouse in excess and eases storage costs. The goal of JIT is to have no more, and no fewer, materials on hand than you need at any moment.

Review monthly. Analyze how you may reduce expenses, utilities, services, etcetera.

Delay Disbursements.

Negotiate extended payment terms from suppliers. Request 45+ days, instead of 30. Keep more money to use in your own business.

Postpone payments. Take advantage of later payment terms. Wait to pay each bill until just before its due date, but still pay on time. Electronic payments are faster. Ensure checks are dated prior to the due date.

Positive Cash Flows Take Time and Effort

We’ve considered effective ways to boost cash, plus avoid negative cash flows.

The overall concept is simple. But it requires consistent effort to see results… In your bank account and business growth.

The flow of cash will be in your favor. So, you avoid losing a fortune. Another benefit is that if you foresee a financial storm, you can take preventative money in and money out actions. To steer clear of hot financial water.

Start today. Enjoy healthier cash flows tomorrow.