Managing your cashflow

I was giving a presentation the other day on raising funds for smaller businesses, and as part of that suggested that the first place to look for funding is within the business, by managing cash effectively.

Here’s a few tips that I have used in the past:

  1. Set payment terms with your customers
  2. Get them used to paying on time (that’s a whole topic in itself)
  3. Take deposits and stage payments – if you ask, and don’t get, you are no worse off
  4. Get payment on completion of work, not commissioning
  5. Don’t offer prompt payment discounts
  6. Always take prompt payment discounts
  7. Get your suppliers to give you right of return if you don’t sell the stock
  8. Use right of return
  9. Get stock on consignment (you don’t pay for it up front)
  10. Get your suppliers to drop ship – they ship direct to your customer on your behalf
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About timluscombe

Tim is a speaker and corporate finance advisor who takes complex issues and presents them in plain English. He's a partner in www.klopartners.co.uk
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