3 Ways to Optimize Your Cash Flow

Day officesA recent article, 3 Ways to Get a Better Grip on Your Cash Flow, by Brian Sutter, discusses the significance of cash flow for company growth. Simply put, cash flow is the amount of cash coming in and out of your business. The more cash that flows into your business, before you must transfer money out, the stronger your financial foundation will be.

Below are 3 ways to improve your business’ cash flow.

  1. Timely and efficient collection of accounts receivables

Accounts receivables are basically sales that have not yet been collected in cash. When these are not collected or collected late, the money in your account gets tied up and adversely affects cash flow.

Consider the following to help get customers to pay you on time:

  • Create credit and collection policy to follow.
  • Consider invoicing early.
  • Use invoicing software.
  • Hire a third party to ensure payments are received on time.
  • Run credit checks on customers desiring credit.
  • Offer rewards to customers who pay early.
  • Penalize customers for paying late.
  • Measure your average collection period carefully.
  1. Negotiate extended payment terms

Carefully review payment schedules and discuss better payment terms. Consider negotiating for a net-60 or net-90 schedule instead of a net-30. This will allow you to have access to your cash when you need it to boost sales or increase operations.

  1. Proper management of stock

Improper management of inventory negatively affects cash flow. Inadequate stocks will put your company’s reputation at risk and you will lose money if you lose track of inventory.

To manage your inventory properly, don’t place orders before reviewing your previous sales over the past 12 months and finding the trends.


Learning to properly manage your receivables, payables, and inventories is the key to developing a strong cash flow and thus business growth and expansion. YourOffice is a leader in providing the most prestigious executive office space and shared office space for any size business. Convenient, hassle free, and move in ready- our offices, meeting rooms, and conference rooms are designed to meet your business’ every need.

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