What Does Positive Cash Flow Mean for Your Company?

There are many indicators you can use to evaluate your company’s health, and one of the biggest factors is cash flow. Regardless of how well your business appears to be doing, if cash isn’t coming in, something is wrong somewhere. Maybe it’s because you can’t get your clients or customers to buy more than small products or services at a time. Maybe you’re paying too much in rent or on loan payments. Maybe you can’t get clients to pay their invoices, but everything else is going perfectly. Regardless of the issue, there are ways to increase the flow of cash into your business.

If getting clients to pay is the issue, implement a deposit policy so that your financial hit isn’t so great if payment is late (or doesn’t come at all). This can also be a good way to root out customers that aren’t as dedicated as they appear to be. In the same vein, you can orchestrate payment plans to make orders or services more manageable for clients, especially your regulars that you don’t want to insult by demanding payment aggressively. On the other hand, you may have clients that pay regularly, and you can reward them with discounts on orders and services that are paid in full within a certain time frame. This can encourage others to do the same.

Some of the easiest ways to increase cash flow could be right under your nose, hidden within your daily operations. If you have any equipment or product that you’re not using, you can sell it or rent it out. Reducing clutter and clearing out space can do wonders for mental health as well. After you’ve decluttered, look at your contracts and compare them to the services you are actually performing for your customers. If you do complimentary work as part of making your customers happy, this can be beneficial for establishing a returning client base, but it could also be hurting your bottom line. Reconsider your practices and determine if customers should be paying for extra work. This doesn’t necessarily mean you should be charging for every extra effort or nicety, but if you or your workers are spending a lot of time completing those tasks for free, you should be weighing the rewards adequately.

A reduction in cash flow can create a sense of fear within your company, but there are many ways to get your finances back on track. Examining your business operations and making adjustments are just some of the ways you can make your company more efficient.

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