How Companies Keep the Cash Flowing
In This Chapter
Delaying bill payments to increase cash flow
Collecting accounts receivable more quickly
Using a receivables securitization program
Ordering less inventory
Finding quick cash
Managers sometimes face a shortage of cash to pay the bills, and they need to find ways to fix the problem. They can use different strategies to get their hands on cash quickly when running a business.
In this chapter, I review the pros and cons of the possible fixes available when a manager finds a red flag about a company's cash flow.
Slowing Bill Payments
Short on cash? Well, maybe you can just let your bills slide. It may not be the most responsible policy, but sometimes doing so can get a company through a fiscal rough patch — as long as its suppliers are relatively patient. When businesses buy on credit and don't have to pay cash upon receipt of the goods, this is called trade financing. Often businesses must pay for those goods within 30, ...