Basic Management Tips for Improving Cash Flow

-Steve LeFever
Business Resource Services

1. Make preparing invoices your highest priority
2. Before sending the first bill to a new customer, ask the name of the person who authorizes the payment and address the bill to that person
3. Provide customers with information allowing them to make payments directly into company bank accounts.
4. Include due dates on all invoices that the company sends out.
5. Send invoices separately from statements
6. Send stamped, self-addressed envelopes with the bills
7. Reduce the grace period for late payments and increase the frequency of reminders to late payers
8. Copy incoming checks, depositing the originals immediately and using the copies for check posting and accounting
9. Have bookkeeping pay suppliers on a chronological basis rather that the easy routine of paying all on the same day
10. Centralize spare parts inventory
11. Standardize auxiliary materials and spare parts
12. Scrap, rework or sell obsolete spare parts
13. Pare down the number of raw materials specifications in use
14. Decrease all stocks held for “safety” purposes
15. Reduce the lot sizes used for purchasing supplies
16. Reduce the amount of finished goods on hand and
17. Refine the accuracy of the company’s revenue statements.