Toughen-Up Strategies for Increasing Business Cash Flow

Revenue is an integral part of a small business’s operation. Without a healthy flow of money coming in, it is difficult for a company to succeed.

Here are a few key strategies for entrepreneurs to exercise to make the most cash out of their venture.

An article published by Small Business Trends states that the first tip for acquiring more cash is to look into money containment vehicles. Instead of placing the company’s cash in a personal or business checking account, it is a wise tactic to put it in an interest-earning account. This allows the opportunity to make money with the existing funds. Plenty of banks offer these accounts and will not incur service charges if there is a minimum balance satisfied.

Another strategy is to utilize credit cards. Many stores offer a loyalty credit card for business owners. This allows for entrepreneurs to build credit while also gaining rewards. Some cards offer cash rewards, which can add up to a significant figure over time.

Running a small business can be tough, but a couple of simple tips can alleviate some of the startup costs. One of my favorite tips is to obtain a business credit card that offers cash back on purchases.  It’s always nice to see a cash back credit on your statement at the end of the month which you can apply to your bill.

As tempting as it may be, experts discourage business owners from paying bills right away. Many entrepreneurs are eager to take care of their expenses as soon as possible. While this is not a bad practice, it can be handled in a more efficient way. Some suppliers and vendors allow for a 30 or 60-day window for payment. This is advantageous because it allows for businesses to hold onto money much longer in case of an emergency.

Switching to paperless systems can make for significant cost reductions. Business owners can save vast amounts of money on supplies such as paper, postage, ink, and other utilities. Instead of paying employees with physical checks, managers should encourage direct deposit. It is quicker and more efficient than paper payments. The beauty of the 21^st century is that computers have simplified virtually all tasks that require paper.

An important tip is to enforce a faster payment policy. Some entrepreneurs send out monthly invoices to their clientele. An effective strategy is to send invoices out more frequently. Customers will be prompted to pay in a quicker fashion which in turn will help provide a stable cash flow.