There are many intangible things in life that business owners value highly. Among them are freedom, having options and peace of mind. Having sufficient cash can assist greatly in obtaining these intangible treasures. Here are seven suggestions to having more cash. As CEO I know that you do not have time but make sure someone in your company is giving sufficient attention to each of these areas.
1. Consistently review and “work” your accounts receivable list. By consistent I mean weekly.
2. Do not pay invoices before they are due unless a cash discount that makes sense is offered for early payment.
3. Keep only the amount of inventory on hand needed to satisfy orders. Know this number and watch it closely.
4. Have a thorough and complete credit check process for all new accounts and collect cash up front for those that are questionable or let your competitors have them.
5. Keep the credit lines with your bank open and expanding if necessary by maintaining a healthy relationship with your banker. Meet your loan covenants and give your banker accurate up-to-date financial statements on a regular basis or when needed.
6. Review and analyze key productivity measures in your business weekly and make corrections timely when goals and standards are not met.
7. As CEO, spend your time on growing your business, maintaining vital relationships with key customers, and planning strategy. If you do not have time for these activities, something is seriously wrong. Get it fixed now!