Strategies to End Cash Flow Insommnia

Inc. Magazine put this article out this month, but it’s some some rather unusual statements beyond the 3 reasons, so we’ll editorialize on their headings.

  1. Making payroll: Inc. would like you to use just-in-time workers, but in a full employment economy, I’m not sure this is practical. I don’t see any pools of people outside Home Depot anymore. If anything, keep your workers on even though cash flow is tight….you don’t want to lose them. Inc. also advocates missing your own paycheck, which I’ve done, or moving it around as cash flow permits. Wives are not fond of this strategy.
  2. Paying outstanding bills. Yes, of course you should pay them, but try to get early payment discounts, or let them run to term on net payment. Stay on top of receivables
  3. Sustaining inventory levels. This is interesting, because it might be harder to get supplies in a full employment economy, so keep inventory higher than you might. You might also be able to negotiate discounts for continuous shipments, if you know you’re going to use the parts or supplies.
  4. Really stay on top of receivables….you don’t want to be a bank for anyone, unless you’re charging them for it. Offer fast payment discounts….which should really work.
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