Dear Dan: We seem to be getting squeezed from just about every direction these days. My business could sure use a little more cash-in-hand. What do you suggest? – Squeezed for Cash
Dear Squeezed: Bringing cash in the door – and hanging onto it – are essential to operating a profitable business. For many business owners, however, periodic cash shortfalls are as common as the common cold.
And these days, most entrepreneurs could use every dollar they can get. Keeping the cash flowing, and perhaps even building a cash cushion, doesn’t have to involve fancy financial formulas or complicated spreadsheets. Sometimes if you get too caught up in reports, you miss what’s going on right in front of you. The bare-bones of cash flow are common sense. You need to translate sales into real (collected) money as quickly as possible. And you need to guard your cash by making sure your spending is under control.
Here are some ideas that can help put more ready cash at your disposal.
• Accelerate your invoicing: A messy, unclear or inaccurate invoice is far less likely to be paid on time, if at all. Make sure your billings reflect care and attention to detail. Inexpensive, easy-to-use invoicing software can help pull in more cash. MyInvoices (www.avanquest.com) is a good option. Web-based invoicing services are also catching on. FreshBooks.com and Bill.com are both terrific places to easily send, track and collect payments. FreshBooks is popular with freelancers and service providers. Not only do you save time billing, but you get paid faster.
• Crank up your collections: If unpaid balances exceed 30-days, take action. Issue reminders via mail, e-mail or phone. If you aren’t having much luck, get a collection agency specialist to help you out. Find one at The Association of Credit & Collection Professionals (www.acainternational.org).
• Sell excess inventory and idle assets: If you own equipment that’s rarely used, you might be better off selling it and either leasing or renting what you need. And inventory overload can be a serious financial drag for your business. But what to do with excess items – no matter what they are or where they came from – can be a difficult dilemma. Retailers, wholesalers, manufacturers, distributors and others sell goods via centralized liquidation auctions. Liquidation.com is a B2B bulk marketplace where companies sell all kinds of excess goods. Or avoid the bother of auctions by selling to a surplus inventory liquidator. InstantLiquidators.com and PowerRetailing.com buy a wide range of customer-returned and excess inventory. Excess Technologies (www.excessi.com) is a professional surplus inventory liquidator. •
Daniel Kehrer can be reached at
editor@business.com.
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