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