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[H928]How To Cash Flow

by Alan Olsen, Ala

Here are 10 ideas to enhance cash flow:

1. Assess Your Risk Up Front

When you do work without being paid up front, you are extending credit. Discuss your billing procedures with your customers up front. "We expect payment in 30 days; is that a problem?" If it is, you need to know ahead of time and make an informed decision about whether you really want to loan your new customer money.

2. Bill Immediately

Customers do not pay for what they have not yet been billed. Although many owners believe they have efficient billing procedures, our experience is that delayed billing is a primary cause of poor cash flow. You cannot bill soon enough!

3. Bill Thoroughly

Confusing bills provide your clients with an opportunity to delay paying you. Furthermore, be very specific about the payment terms and stick to them. If you expect payment in 30 days, say so; and detail what happens if you are not paid. Do not fear losing business! If you are not now getting paid for work you have done, what is left to lose?

4. Make Paying Easier

Do you accept credit cards? If not, it is time you evaluated this opportunity. Do you enclose a postage-paid return envelope with your bill to expedite payment?
Have you considered offering discounts for prompt payment? When we work with clients, we look at every aspect of their billing process.

5. Collect Your Bills

Receivables are loans your company provides to your customers or clients. Unless you really want to be a banker, develop a protocol for your collection effort that begins the moment a bill leaves your company. History has demonstrated that the lack of a well-developed collection protocol is the primary cause of poor cash flow.

6. Cut Unnecessary Expenses

Reduce the cash that is going out. Carefully examine your fixed expenses. Look at your utility bills and implement a conservation program. Review your insurance premiums to be sure you are not over-insured. How many subscriptions and memberships are really needed?

7. Time Your Payments Carefully

Review all of your vendor bills to ensure that you are taking advantage of any discounts. We can help you analyze which discounts are best for you. Delay all non-discounted bills as long as possible.

8. Put Your Cash to Work

First, make daily deposits! Second, make your deposits before the bank stops its daily transactions (2:00 PM - 3:00 PM). If your mail arrives late, get a post office box to speed up delivery. Finally, transfer idle cash into interest-bearing accounts. Even at 2% or 3%, this money adds up.

9. Evaluate Your Payroll Schedule

Consider changing your payroll from weekly to biweekly or monthly. Reducing the amount of payrolls, in turn, reduces payroll tax deposits. Consider payroll advances to help sway employee resistance.

10. Plan Ahead

Without exception, planning ahead is the most crucial aspect of cash flow management. Prepare a cash flow budget based on last year's history, and you can begin to develop a game plan.
Talking to your banker before you need money will provide you a better working relationship and better rates. If you need assistance in developing a cash flow budget or if you would like us to introduce you to a banker who understands cash flow, call us today.

Summary

Cash flow management involves analyzing risk and requires both short- and long-term approaches. As a business owner, you know how crucial it is to maintain your profit margins. This guide was developed to assist you in ensuring that cash flow problems do not siphon off those profits unnecessarily.

Although we present a number of ideas here, they are general in nature in order to give a wide variety of insights into managing cash flow. In truth, cash flow management involves analyzing risk and requires both short- and long-term approaches. We will be happy to develop a specific approach for you and your business.

Included are two guaranteed ways to instantly increase your cash flow. Utilizing just one of the methods below will increase your monthly cash flow by a minimum of $250 and well over $500 per month if using both techniques. These methods are safe and effective; however, there are a few simple rules that you must follow to ensure your success.

The first creation technique gives you more money on your very next paycheck by simply increasing the number of exemptions that you are claiming with your employer. So for example, if you are currently claiming you, your wife and one child, you would raise your exemptions from three to seven. If you are single and only claiming yourself, then you would increase your claimed exemptions to five. This will vastly increase your net take home pay by reducing the amount of taxes deducted from your pay check each month. To find out exactly how much you can increase your net take-home pay, visit www.fincalc.com and select the ?calculators? button at the top of the page.

After increasing your exemptions, the next step is to make sure that you are offsetting any added tax liability on the extra money you are receiving in the form of business deductions. For example, if you increased your exemptions and created an additional $200 in net take-home pay, then to offset any additional tax liabilities at the end of the year, you will also need to increase your business tax deductions. As a general rule, business deductions must exceed your increased take home pay by three to four times. Or, in other words, for every one dollar you make in extra cash flow from increasing your exemptions, you will need to deduct $3.00 to $4.00 in business expenses.

As a word of caution, you will need to keep a detailed ledger to make sure that expenses are keeping up with the amount of extra money you are receiving. If your monthly business expenses are not equal to or greater than the extra money you are receiving, then you should lower your exemptions immediately.

The second cash creating technique involves selling your plasma as a way to supplement your income or to make a few extra dollars to carry you over during hard times. You can make between $20 and $35 per visit and you can give plasma twice in a 7 day period, which equals around $200 to $300 per month in extra cash flow! Not a bad way to cover your extra cell phone minutes, added fuel costs or even payoff high interest debt.

Most families need an extra $200 per month to carry them over during hard times, and many must rely on title loans, payday loans, signature loans, etc. to help make ends meet, often paying a minimum of 24% interest on the borrowed money. Donating plasma is a quick, safe and free way to get a few hundred dollars when you need it most.

Article Source : Pg. 14

About Author

Both Alan Olsen & Chad Sunyich are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Alan Olsen has sinced written about articles on various topics from Careers and Job Hunting, Liposuction and Finances. . Alan Olsen's top article generates over 18100 views. to your Favourites.

Chad Sunyich has sinced written about articles on various topics from . The author Chad Sunyich says here about two safe and effective ways to instantly increase your Cash Flow. He has few simple rules that shall help you on wealth creation technique and. Chad Sunyich's top article . to your Favourites.