Cash the Life Blood of a Business.

This asset can be more important than employees, customers, revenues, mission statements or catchy web pages. Without cash a business dies. Here are some tips we have used over the years to improve cash-flow in a business.

• Have a cash plan for your business. It is hard to improve if you don’t know where you’re at.
• Collect your receivables. (We will dedicate a future edition to this crucial topic.)
• Eliminate delays in invoicing - get them in the mail as soon as possible.
• Request progress payments on large orders.
• Time your invoices to coincide with your customer's payment schedule.
• Grant cash discounts to key accounts. (Only if you know they will, in fact, pay earlier.)
• Raise selling prices after evaluating volume considerations.
• Negotiate special payment terms with key vendors.
• Set up a payment schedule for large payables. (Vendors tend not to complain if they are receiving regular payments that they can count on.)
• Use extended payment plans for business insurance premiums.
• Take advantage of installment option on Real Estate and Personal Property taxes.
• Determine if you qualify for budget basis payments for utilities.
• Negotiate billing dates that coincide with publication dates in large ad campaigns.
• Have retainers and payment terms with sub-contractors that correspond with the terms you have with your customer.
• Use internet to obtain competitive prices and renegotiate with current suppliers.
• Pay for large service contracts over life of contract.
• Use automated payment systems to time disbursement with exact due date.
• Adopt a "just in time" inventory system for key items, if you can trust your supplier to meet your schedules.
• Defer fixed asset additions.
• Consider leasing vs. buying to eliminate the down payment.
• Set up a lock box system at your bank for cash receipts.
• In a seasonal business, negotiate "skip payments" on bank notes. (10 payments per year instead of 12.)
• Make use of automatic sweep accounts to minimize borrowings or maximize invested cash.
• Negotiate with your bank for a special purpose loan that is tied to the terms of large contracts with unique payment terms.
• Tie a short-term loan to a future cash inflow like a tax refund.
• Consider factoring accounts receivable.
• Avoid cash travel advances for employees. Reimburse on actual expenditures instead. If an employee doesn't have a credit card and they travel often, offer to reimburse the annual fee. Don't use company credit cards.
• Base executive and sales compensation primarily or gross profit.
• Pay sales commissions only after collection from the customer.
• Schedule annual bonus and profit sharing payments during seasonal periods of high cash in-flows.
• Change payrolls from weekly to by-weekly or monthly.
• Delay payroll by five to seven days after end of pay period.
• Evaluate cash impact of owning company cars vs. reimbursing employees for business use of their cars.
• Liquidate obsolete or unusable inventory.
• Sell non-productive assets.
• Rent excess plant space on a short term basis.
• Determine if your scrap is salable.
• Consider sale and leaseback arrangements. (If you have equity in selected assets.) 
• Institute a company wide inventory reduction program. (From raw material to shipping supplies.)
• Determine if you qualify to receive inventory on consignment. Pay only when you use it.
• File income taxes on a cash basis if you meet the requirements