10 ways to avoid a cash flow crisis

  • Checklist: 10 ways to avoid a cash flow crisis

    1. Regularly check your cash flow forecast to keep on track with finances and to avoid shortfalls.
    2. Send out invoices promptly and be quick to chase overdue bills.
    3. Get to know your customer payment dates and don’t ignore irregularities or delays — a poor paying customer might be about to go bust.
    4. Avoid laying out a lot of cash for unnecessary quantities of stock.
    5. Cut back on pointless spending and costs.
    6. Stay on good terms with your bank or other lenders in case you need to extend credit levels or apply for finance.
    7. Create a short-term cash boost by offering incentives for early purchases or quick payment.
    8. Consider all funding options including hire purchase, leasing, loans and invoice discounting.
    9. Assess the frequency with which you pay suppliers, tax bills and so on — is it possible to pay in instalments or make terms more flexible?
    10. Have a warning system in place so if you are heading towards the red, you know as soon as possible.