If your business is dealing with a number of issues related to the cash flow, it is time to make some adjustments and fix the problems! Having a cash flow issue can be financially devastating to the company. You have a lot of small businesses then end up crumbling because they didn’t take the time to properly manage their cash flow. What exactly is the cash flow all about and how can you find ways to manage it in an effective way to build up your business? Proper cash flow management will really come down to the way in which you have a bookkeeper informing you about the company and the way in which you are collecting the money from your customers.
What is the current collection policy looking like? Do you have a system in place to show customers that their payments are expected in a timely manner? Do you have a time frame as to how soon you will be able to collect the money from the customers? Customers need to know that you are serious as to how soon you need to collect the money. You should focus on getting the customers to make a payment to you now and then collecting money within a specific time frame. If they do not pay, you want to have a clear policy that shows you have interest charges and fees that will end up being enforced on the customers. This helps to motivate people to pay quickly as they don’t want to end up with some pretty high interest rates on their bill!