Cash Flow and Collections

Cash flow issues are often a fact of life for small businesses, especially in today's economic downturn. One of the most common suggestions for avoiding such issues is to build a financial cushion. Consider tightening your inventory so that you're not tying up a lot of cash. Bill a project when it's completed, and invoice products as soon as they're shipped. Don’t pay your supplier bills the day they arrive. If possible, wait 30 or 60 days. If suppliers want their money faster, ask for a discount for early payment. You might also consider comparison-shopping for suppliers, or even raising your prices if the market will bear the increase. And don't expand your operation until you have enough cash to support growth.