More Tips to Keep Your Business Raining with Cash Flow

We provided you with eight tips to manage your cash flow. As we said in that article, your business can have a wealth of clients while staying busy, and still be in danger simply for not ensuring it has the cash flow it needs. You can do more to have cash on hand to pay bills, meet payroll and grow your business.

Check new customers' credentials: This sounds like an insult to your new customer, but it ensures you won't be dealing with a customer with bad credit. Consider doing a standard credit check or ask for trade references. If you want to go further, ask for a bank reference or for permission to run an external credit check on the customer.

Diagnose your cash flow's health: Create cash flow projections to see a snapshot of your cash flow's future. If you see too much cash going out of the business, then you'll need to adjust spending and invoicing to avoid that. If you've never done it -- ask for expert advice or involve employees who would like the challenge and the opportunity to stretch their skills. When we do things for the first time, it feels like we're doing it wrong. But with practice, you'll get better at it. Then you'll wonder why you never used cash flow projections before, as they become a valuable tool.

Motivate customers to pay: We've suggested offering discounts for customers who pay early and add penalties for late payment. If giving discounts isn't doable, consider other motivators. Maybe you could throw in an extra product or service. You may have to brave it and not provide your customer with products or services if they have yet to pay an invoice. This scares many businesses because they're concerned it'll muck up the relationship. But this sends a message that you don't do business free.

Outsource payment collection: You may want to consider having a business that has a core process of tracking down unpaid invoices to do the dirty work for you. They do it all the time and know how to work with the clients. The drawback is that the outsourcer won't have the personality or same vision as your company. So here you might consider interviewing different personnel to see if someone's personality represents your business better.

Take care with growth: Expanding is a balancing act. You don't want to grow too big or too fast and find yourself out of business. Here's another situation where cash flow projections can help your business. If you have a loan, consider talking with your lender for solutions to help you through a rough period or one that's coming.

Yes, it sounds like more work for you -- but it makes things easier for your business in the end. After all, with available cash flow, you'll be able to gain more resources to grow your business and take some things off your plate.