Chapter 21
Ten Tips for Maintaining Cash Flow
In This Chapter
Maintaining good credit policies and procedures
Dealing with slow-paying customers
Communicating with clients precisely and professionally
Even in good economic times, cash flow can be difficult to manage. And when the going gets rough . . . well . . . maintaining cash flow can be a real challenge. In a tough economic climate, the pressure’s on to improve liquidity and to get the cash you need to pay your bills.
One really good way to maintain cash flow is to implement and stick to solid credit and collection policies. The tips that follow help you develop good policies and keep the cash rolling in. They’re presented in no particular order, as we consider all of them to directly impact your company’s cash flow.
Reviewing Your Credit Policies
Periodically review your credit policies, particularly those relating to new customers. Established clients are a bit trickier, as most won’t be pleased with new credit restrictions, but you have to restrict credit when your industry changes or when a customer’s business seems to be faltering. If you diplomatically explain why you’re tightening up credit policies, they’ll understand (whether or not they admit it). Make sure that all employees involved in the sales process are trained in your credit policies and procedures, as we outline in Chapter 4, and follow up to be sure that they’re following proper procedures.
Here are some tips for reviewing credit policies:
Review interest ...
