All entrepreneurs strive to maximize their bottom-line profits. They regard it as a measure of their success. These proprietors generally achieve this objective by boosting revenues and minimizing expenditure. Only then do these businessmen have enough money to operate their establishments. Otherwise, they find it very difficult to settle their suppliers’ dues on time and meet payroll. Under such circumstances, incurring necessary expenses, they associate with their market operations becomes a tall order. It the long-run, it can ruin their organization’s reputation. These businessmen obviously want to avoid this from happening. This is where proper cash flow management comes into the picture.
Jason Proch – How can entrepreneurs improve their cash flow position?
Jason Proch is business professional from New York who is currently studying for his MBA in London. He also holds an engineering degree and years of valuable experience in the manufacturing industry. He dreams of the establishment of a global company in the near future. He intends to use this organization to serve humanity.
According to this professional, it is possible for entrepreneurs to improve their organizations’ cash flow position. All they need to do is to consider and implement the following 3 important tips. These are as follows:
Raise invoices on customers immediately
This is the first thing entrepreneurs need to do. As soon as they make a successful sale, they should immediately arise invoices on their customers. Such documents should clearly indicate products these individuals purchase, their prices and total amount payable.
Moreover, such paperwork should clearly indicate the terms of payment, the time limits and consequences of defaults. This information should be very clear and unambiguous. Only then will such clients consider making prompt payments. To encourage these individuals to take this course of action, the businessmen can offer them cash discounts.
Request for cash deposits from new customers
Most entrepreneurs are aware that entering into business dealings with new customers is always risky. These businessmen can never be sure of the creditworthiness of such individuals. However, refusing to finalize contracts with them is not always the prudent thing to do. In many cases, they may have lucrative offers. In such cases, these proprietors shouldn’t hesitate to ask for deposits from them. Only then should these owners start working on their projects. This helps to minimize the pressure on their cash flow position in the long-run. In the worst-case scenario, even if the agreements do turn sour, they won’t run out of money.
Penalize slow-paying customers
All businessmen have some customers who are habitual defaulters. They never pay their dues on time despite constant reminders. In many cases, these entrepreneurs may be reluctant to enter into a commercial transaction with such clients. They shouldn’t hesitate to penalize such individuals to ensure they may make their payments on time. However, if they still refuse to do, then these proprietors should resort to legal action.
In the opinion of Jason Proch, entrepreneurs don’t need an expert to tell them the importance of money. These businessmen regard it as a lifeline when it comes to running their establishment. This is the reason why they look for suitable ways to improve their organization’s cash flow position. Implementing the above 3 important steps can help them in this endeavor.