Poor Cash Flow?

On paper you are profitable but you don’t see or feel the money?

  • chronically short of cash?
  • bank facility overdrawn?
  • spending most of your day chasing money?
  • stealing from Peter to pay Paul?
  • don’t know where the next wages will come from?
  • having to make excuses for late payments?
  • creditors knocking on the door/worried?
  • embarrassed – having to put up with “knowing” looks and insinuating remarks?

The powerless feeling that comes from not having ready cash can:

  • affect your self-confidence and make you less creative/productive
  • make you panicky
  • distract you/take you away from vital activities
  • make you miss opportunities
  • start rumours…
  • taint the image your creditors have of you
  • affect your credit score

What to do about it?

  • Identify potential sources of cash:
    • your creditors – negotiate extended payment terms – an extra 30 to 60 days?
    • deposits – securing part payment (enough to cover delivery cost, at least – up to 75%) at time of order
    • stock – selling old stock on a special offer (at old prices?)
    • factoring your invoices
    • short term unsecured business loan – probably the best choice (easiest to secure and definitely the quickest)
  • Take positive action
    • talk to your creditors – play open cards with them
    • incentivise your debtors with early payment discounts
    • offer a discount for full payment up-front
    • make over your debtors to your creditors
    • etc.
  • Prevention is better than cure!
    • Don’t be shy. Be quick and firm about collecting on invoices!
    • Avoid mistakes that let people hold back payment

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