Managing cash flow is critical for staffing firms, who often pay their employees weekly but don’t receive payment from clients for 30 to 45 days. At its most basic, cash flow management means delaying outlays of cash as long as possible while encouraging those who owe money to pay it as rapidly as possible, according to an Entrepreneur magazine article.
The article provides numerous tips for managing cash flow, including:
- Prepare cash flow projections for the next year, quarter or even week
- Manage payables as efficiently as possible – for example, use electronic payment processing to pay bills on the very last day they are due
- Improve receivables by offering discounts to clients who pay their bills rapidly and potentially institute a cash on delivery policy to avoid slow-paying customers
- Survive shortfalls by planning for them ahead of time
For more tips and information, read the entire article by clicking here.