Keep your cash flowing!
The lifeblood of any business is its ability to collect cash and pay bills as well as pay its employees, and generate revenue for the owners. Far too often, small businesses are profitable but the cash flow is inconsistent and meeting day to day commitments can be difficult. Each week, we will provide a new tip to help you get your cash flowing!

Review your expenses and costs regularly: Take a critical look at all expenses on a regular basis. It is amazing how expenses can creep higher when we are not keeping an eye on them.

Deposit payments promptly: Don't let cheques sit in the safe or a drawer waiting to go into the bank. The sooner you deposit money that you receive, the sooner you can make that money work for you.

Be aggressive with past due accounts: As soon as an account becomes past due, phone them to ask when you can expect payment on the account. If the customer promises something within two weeks and you do not receive it - call again! Remember the old adage about the squeaky wheel getting the oil - be the squeaky wheel. If all attempts to get a client to settle their account fail, do not hesitate to seek the advice of an attorney or use the services of a collection agency. Remember though, that many of us experience periodic difficulties and a little patience and flexibility where warranted may go a long way in helping a good customer get through a difficult time.

Invoice Promptly: The faster you mail an invoice, the faster you will be paid. The best practice is to provide an invoice to the customer upon completion of the service or delivery of the order. If this is not possible, have a schedule for preparing and mailing invoices - weekly is ideal. All invoices should clearly state due date and payment terms.

Written Policies: Written credit & collection policies help to keep the playing field level for everyone. Your employees will know what to expect of customers in terms of bill payment, new employees know what's what, and all clients are treated equally. You may consider having your written policies as part of your contract or agreement with customers but in any case, all of your customers should be aware of your policies and have a copy of them.

Follow sound credit practices: New customers are great but a new customer who can't or won't pay their bills ends up costing you money. Ask a new customer for trade references (3 is a good number) and a bank reference. Check credit ratings. Most importantly, do not extend credit to a customer until you are comfortable with their ability to pay their bills.