A huge customer falls behind, busy season runs slow, inventory’s mismanaged — there’s no shortage of factors that can result in an unexpected cash-flow crunch.
That’s why it’s so important to update your company’s cash-flow projections on a regular basis — to ensure you have the most up-to-date info at your fingertips.
Rather than dipping into an emergency credit line, here are three proven ways to get your company out of a cash-flow crunch:
1. Beef up collections. Chances are you have at least a few customers that are taking longer than you’d like to pay up. So now’s the time to step up your collection efforts. But you can do this without compromising your customer relationships. Try rolling out early-pay discounts, which may benefit both you and your customers.
2. Have Sales reach out to customers. While A/R is busy getting problem customers to pay up, let Sales know how critical it is to keep your best customers happy. Reason: If your competition gets wind of any problems, they’re going to use that info as leverage to steal these customers away.
3. Ask your vendors for a hand. The companies you’ve been doing business with don’t want to lose you — especially if you’ve been a good customer. If they can, most vendors will even be willing to do a little extra for you. Ask if they can extend repayment terms, issue a line of credit, etc., to help you get through the current cash crunch.
Readers, what does your company to boost cash-flow during a crunch? Let us know in the Comments section.