Inadequate cash flow is one of the main reasons businesses fail. Developing an effective cash management program can help you manage your contracting firm’s cash flow and position it for future growth. Here are some suggestions that can improve cash flow.
Minimizing expenses can reduce the flow of cash out of your business. Pay bills only when they are due and take advantage of discounts for prompt or early payment.
Arrange to send invoices as soon as you have delivered goods or completed services. You may be able to speed up the payment process if you send invoices electronically instead of by mail. Encourage customers to pay via electronic funds transfer rather than by check.
Run the numbers and if they appear attractive, look into leasing equipment and heavy machinery rather than buying. Review suppliers to see if you can obtain better terms on phone services, Internet, heat, power, and office supplies.