fuel card for small business
Cash flow provides the fuel needed to boost your small business forward. Cash flow problems can lead to an insolvent business structure and are an important indicator of a failing business. Here are the 7 most common causes of liquidity problems at small businesses and solutions to help avoid them:
1. Non-payment discounts Term
While waiting for a customer to pay once it has delivered a finished product or service can cost your business valuable money. Offer your customers a discount of term, as the 2% Net 10, or 1% 5 net to encourage to make their payments faster to receive a discount.
2. The failure to monitor
The monitoring of business results is crucial to its overall success. Installation of monitoring systems in the areas of their business that can improve cash flow, such as inventory management, order supplies and procurement to reduce waste and improve turnaround times.
3. New customer failure to perform credit checks
Make sure your new customers credit checks before sending out business product to avoid untimely payment or failure in the payment of a business with poor credit histories.
4. The lack of credit insurance
The lack credit insurance, especially when working with clients internationally, may cause the business to lose significant cash flow, if the client is slow to pay or by default. International customers are also more difficult to take financial action against. For more information about how to manage debts a bad deal, read my article titled 5 Ways to mishandling debts.
5. Slow Product or Service Turnaround Times
Shorten delivery times for their products or services to its customers maximize the potential profit level.
6. Taking into cash rather than credit
Change your business structure where their only methods of payment are credit cards or online banking systems to reduce waiting time for payments by check.
7. The lack influence or Factoring Inventory Financing
Failure to advance these financing solutions when their business is the production or manufacture of a product or service to a customer, can make the business of having a short-term problem of cash flow. Consider factoring benefit for the customer order or stock financing of the need to purchase product inventory to your product or service to help your business short of cash flow problem.
Learning of these 7 common mistakes cash flow and implementation of appropriate solutions help your business to improve cash flow and avoid potential insolvency. For more information on how to improve your cash flow, read my article entitled proven tips to improve your cash flow.
Mark Gwilliam, FCCA, uses his international experience to coach small business owners on how to run successful businesses. He combines his natural enthusiasm for sharing his knowledge with his proven ability to provide practical down-to-earth solutions for his clients. He has written several books and owns several companies which offer small business owners integrated business solutions. He writes several business articles in his weekly newsletters “The Bizness” and “Successful Marketing Strategies”. To read these and to have access to more tools and resources to turbo charge your business, visit his sites at http://www.mark-gwilliam.com and http://www.themarketingdude.com
August 17 Biz Minute
