Current Covid19 environment has put a lot of pressure on cash flows of a lot of organizations. Effective cash flow management will come really handy in these times and the one who picks it and implement sooner will stand to gain.
Below are a few handy tips:
- Issue invoices in time i.e. as soon as work is completed.
- Give attractive cash discounts
- Cut Costs to the extent possible
- Provide mobile payment options to get paid faster
- Dispose off the assets which are obsolete and are occupying space
- In case you need an equipment, vehicle, computer etc… taking them on lease may benefit better than buying
- Assess and agree how late a vendor can accept payment from you
- Offer discount on receivables
- Manage inventory effectively
- Keep buffer cash
- Shift short-term focus from profit to cash inflow for ex: offer extra discount for upfront payment
- Identify business risks and prepare in advance
- Take a corporate credit card but use it wisely
- Most important – DO NOT MIX your personal bank account with business bank account.
The author of this article is finance professional with 20+ years of experience. If you need to reach out, do write us back at support@growiseadvisors.com