- Do at least a summarized cash flow out to 12 months. I do a highly detailed cashflow for 2 months.
- Offer customers incentives for early payments (sometimes the cash discount lost is worth the quicker pay...especially if vendors are pressing you).
- Lease equipment instead of buying. Allows cash outflow to be spread out.
- Monitor your inventory. Only keep on hand that which is needed for the short term.
- Monitor spending...goes without saying.
- Postpone hiring until absolutely necessary.
- Avoid waste; recycle wherever possible.
- Cap owners salaries to that which is reasonable for work done.
Thursday, June 14, 2007
Steps to monitor and control cash flow: