How Can I Improve My Cash Flow?

Simply stated, improving your cash flow is a matter of increasing money coming into your business and decreasing the money going out. The more money you collect from customers the better. The less money you spend on expenses the better.

Below are some ways you can improve your money coming in and decrease your money going out, and how Sage 50 can help you keep track of both.

Improving Money In

• Manage credit limits on customers. For customers who pay their invoices quickly, increase their limits so they can buy more. Since you know they’ll pay, you can confidently increase their credit limit. Sage 50 will track the average number of days it takes your customers to pay their invoices and you can use this feature when managing your cash flow reports.

Learn more about changing customer credit limits

• Fill orders for goods and services promptly. The sooner you give your customers what they bought, the sooner you can collect. You can use Sage 50's Sales Order report to help you track orders and backorders.

Learn more about Sage 50's Sales Order report

• Bill customers promptly. The sooner you send an invoice, the sooner they will pay. Don’t wait until the end of the month. Send them immediately after you fill their order. Sage 50 will allow you email invoices in PDF format so that your customers will receive them quickly.

Learn more about sending invoices electronically in Sage 50

• Improve your collections procedure. Use collection letters to remind your customers of their obligations to you.

Learn about printing collection letters in Sage 50

• Make deposits promptly. When you receive money from customers, get it into the bank quickly so it will be available to spend.
• Ask customers for payments upfront.

Improving Money Out

• Don't pay your bills before they are due. Make sure you pay on time, though. The exception to this, of course, is when you receive a discount for early payment. Take the discount.
• Minimize expenses. Cutting down on wasted supplies and resources is a sure method of reducing expenses.