30+ Ways of Improving Net Cashflow
30+ Ways of Improving Net Cashflow- Increase sales (particularly those involving cash payments).
- Reduce direct and indirect costs and overhead expenses.
- Defer discretionary projects which cannot achieve acceptable cash paybacks (e.g. within one year ???).
- Increase prices especially to slow payers.
- Review the payment performances of customers - involve sales force.
- Become more selective when granting credit.
- Seek deposits or multiple stage payments.
- Reduce the amount/time of credit given to customers.
- Bill as soon as work has been done or order fulfilled.
- Improve systems for billing and collection.
- Use the 80/20 rule to control inventories, receivables and payables.
- Improve systems for paying suppliers.
- Generate regular reports on receivable ratios and aging.
- Establish and adhere to sound credit practices - train staff.
- Use more pro-active collection techniques.
- Add late payment charges or fees where possible.
- Increase the credit taken from suppliers.
- Negotiate extended credit from suppliers.
- Make prompt payments only when worthwhile discounts apply.
- Reduce inventory (stock) levels and improve control over work-in-progress.
- Sell off or return obsolete/excess inventory.
- Utilize factoring, or discount facilities, to accelerate receipts from sales.
- Defer or re-stage all capital expenditure.
- Use alternative financing methods, such as leasing, to gain access to the use (but not ownership) of productive assets.
- Re-negotiate bank facilities to reduce charges.
- Seek to extend debt repayment periods.
- Net off or consolidate bank balances.
- Sell off surplus assets or make them productive.
- Enter into sale and lease-back arrangements for productive assets.
- Defer dividend payments.
- Raise additional equity.
- Convert debt into equity.
- Make medium- and short-term cashflow forecasts and update them regularly
07-18-2009, 05:51 PM
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