"Increasing your cash flow depends on what type of business you are in," says Jeffrey Muencz, associate director of SS&G Financial Services and a CPA. "If your business is dependent on billing, such as a hospital or physician's office, the faster you bill it, the better your cash flow will be. If you are billing once a month, maybe you can bill twice a month or even every day, and increase your cash flow.
"If you are lax on billing, you are lax on cash flow."
Other ways to increase cash flow include:
* Know who isn't paying. "If you don't have a good tracking system for your aging accounts receivables by payer source, you are not going to know which source owes you money," says Muencz. "You aren't going to know who to call to ask why you haven't received payment."
* Renegotiate loans.
"This could be difficult, depending on the condition of your company," says Muencz.
* Reduce operating expenses. "This is usually the last resort, because you don't want to cut staff, but a lot of big entities are downsizing or offering early retirement," says Muencz.
* Lease rather than buy. Lease new equipment to avoid large cash expenditures or taking on additional debt.
* Check your inventory. Do you know how much inventory you have and why you have it?
* Challenge your real estate taxes. "These taxes get reassessed every few years," says Muencz. "You can hire an attorney to challenge them, and most work on contingency. I've seen clients who have challenged their taxes achieve significant savings."
* Watch your workers' compensation expenses. Make sure you have a good risk management program and talk with your financial adviser about the possibility of self-insuring.
* Renegotiate your vendor contracts. "If your vendor says prices are going to go up 3 percent this year, go back and fight the increase," says Muencz.
In some cases, cash flow may be out of your control.
"Sometimes the people that are paying the business have cash flow problems and so they aren't getting payment," says Muencz. "Sometimes you cannot control it." How to reach: SS&G Financial Services, (440) 248-8787 or (330) 668-9696