How to Improve Cash Flow in Small Business

Profit making is the bedrock of any business venture. However, small business needs cash to cover running expenses.
Regular cash flow is used for oversight functions such as purchase of operational items, rent, and staff wages. Proper money management, planning and effective budgeting is necessary for growth. Here are a few ways to improve your business cash flow.
Accept Credit Card Payments
You can Integrating a merchant service solution and accept payment cards. The cards could be credit or debit cards depending on the issuer.
Many financial institutions provide different payment solutions for merchants. You could add the payment system to your website or use 'point of sale' machines. Receiving next day value deposits are better than cheques.
Apply for Loan
Apply for a long termed loan that attracts low fixed interest. The long term loan would provide cash to carry out expansion or purchase major equipment. To process the loan present a business plan, collateral and open an account in the bank.
Line of Credit
A credit line is useful when you need money in a hurry. It allows proper money management and ready cash. The money will be useful for miscellaneous and working capital.
CASH
Deposit money
Deposit money into an interest earning account. Avoid long term cash deposits and wait till the facility matures. Make sure the account does not have any hidden charges or penalties.
Sell Obsolete Equipment
There are many companies that have damaged old or obsolete machinery. However there is value even in trash. The obsolete machine could actually fetch a fair price to the right buyer.
Purchase Used Items
To reduce costs purchase used items and equipment. Used machinery would perform the same function as a new machine. Prices of used machinery are usually 55% less than new equipment. The only downside to this strategy is regular maintenance of the equipment.
Repair Used Equipment
Many companies spend huge cash buying new equipment. It is infinitely cheaper to repair used equipment. Use local engineers, carpenters and replace old parts.
Invest in Maintenance
Regular maintenance extends the life of machinery. It is far cheaper to maintain equipment than purchase new/old equipment.   
Stage Payment
Real estate developers have perfected stage payment technique. The strategy involves payment for a service or product in stages.
They assign initial deposits and payments over a specified period. The stage payments could run every 3 months, 6 months or yearly. Customers unable to buy the product outright are contracted to pay a fixed sum over a fixed period.
Spread Payment
Another technique is spreading your payments. You need to estimate amount made, savings interests, and tax. This will provide a clear view of actual working capital. This allows the organization effectively spread major payments.
How to Improve Your Business Cash Flow
  • Setup a Payment Policy
  • Use online software
  • Stretch payment
  • Manage your inventory
  • Reduce overhead costs
  • Sell obsolete equipment
  • Accept credit card payment
  • Get a line of credit
  • Work with a qualified accountant
  • Apply for log term loans

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