Cash Flow is simply the flow of funds in and out of a business during each month. Cash coming in includes purchases or accounts receivable. Cash flowing out includes payments of expenses like salaries, rent, and other operating expenses. Cash flow is an important measure of the health of a company. As Jack Welch, the former CEO of General Electric said “If had to run a company on three measures, those measures would be customer satisfaction, employee satisfaction, and cash flow.”

What Are the Benefits of Good Cash Flow Management?

• Reduced anxiety, because good cash management will result in controlling cash instead of letting things happen accidentally. 
• Better predicting when money will be tight and responding accordingly. 
• Creditors are more likely to trust a company that manages its cash well. 
• Knowing the status of cash will help a company know when it can grow.  

Ways to Improve Cash Flow

Use these tips to improve cash flow:

• Carefully review and control all expenses. 
• Lease instead of buy to pay in small payments instead of a lump sum. 
• Manage inventory carefully. Don’t buy more of what doesn’t sell. 
• Offer discounts for early payment to accelerate inflows of cash. 
• Conduct credit checks to weed-out non or late-paying customers. 
• Form a buying cooperative to better negotiate prices with suppliers. 
• Send out invoices quickly to accelerate receivables. 
• Collect aging receivables. 
• Use electronic payments to delay expense payments. 
• Utilize higher interest savings accounts. 
• Carefully explore price increases to find the best cash flow pricing position. 
• End unprofitable relationships.  

Avoid these Cash Flow Mistakes

• Don’t force growth faster than cash will allow. 
• Don’t overspend on sales. 
• Don’t ignore seasonal fluctuations in business. 
• Don’t mishandle the payment of taxes. 
• Don’t ignore the cost of bad hiring.  

Seek Expert Financial Assistance

Contact Increase Lending for financial solutions to address your cash flow needs and growth goals. Our experienced financial professionals can help you secure funding to meet your business’s financial needs.