Easy Tips to Maintain A Positive Cash Flow

Cash flow is constantly on the minds of A/R professionals. It flows into your business from customers who pay invoices, and it flows out as you pay off business expenses. Keeping track of your company’s cash flow is one of the most important aspects of a business. The following tips can help keep your company’s cash flow positive.

Negotiate

Try negotiating billing terms with your vendors that will work with your business’ billing cycle. If you are able to invoice your customers for products or services rendered, the incoming cash flow can be used to pay off any vendors that you owe.

Communicate

Let your customers know from the start what your accounts receivable policies are. This can be accomplished by providing customers with a clearly outlined document at the time contracts are signed or when business begins. A phone call or email to your customer during the billing cycle reminding them of when payment is due can also be effective, and your customer will know exactly when payment is expected.

Keep Tabs on Unpaid Accounts

Each month, create a spreadsheet with all of your current accounts, indicating which are due and on what date. Keeping the list organized by the due date will allow you to stay on top of these accounts. As the due dates approach, you will be ready to make those calls or email to avoid late payments.

Consider Using an Outside Collection Agency

Most likely, at some point, some of your accounts will go unpaid, and you’ll be faced with a decision to try and collect yourself, write off the debt, or turn to an outside collection agency. Using an OCA to collect unpaid debt is a great option that can actually help your business grow.

Positive cash flow is critical to the success of any business. Unpaid accounts can negatively affect your company’s bottom line, which is why monitoring and maintaining positive cash flow is key.

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