Tips For Managing Cash Flow In Challenging Times

Tips For Managing Cash Flow In Challenging Times

Understandably, no one want to make drastic changes in how they operate, or learn how to do without. But with the uncertainty in the US economy most business owners I know have had to make major changes in the way they do things. We really were on quite a ride. Not too long ago, (just a few short years actually) realtors couldn't even keep a home in their inventory, they were off the market so fast - at least here in southern Oregon they were. I don't have to tell you how housing is going now - you know.

When things are going well it's easy to pick up wasteful habits. Like spending money on advertising without tracking it, or buying things for our business more because we want them, than because we need them. I won't get into politics here except to say that the mess we're in is not the fault of the good working men and women of America. In my opinion the real belt tightening needs to happen in Washington... leave small business owners alone. But you and I know that's not going to happen.

The last thing you need in a down economy is to have a significant amount of your cash tied up in inventory that's just sitting around. That's another example of belt tightening too. The harder things get (can anyone say inflation?) the harder it becomes to keep enough cash on hand. Because the only flowing of cash in inflationary times seems to be flowing right out of our own pockets.

Have you noticed how hard it is to keep cash in your wallet? Everything costs so much. And I'm afraid this is only the beginning of what will be some very difficult times ahead. Be careful not to tie too much money up in inventory when you need it in other areas. Just a reminder.

This is would be a good time for paying attention to the terms your various vendors are offering, and buying more from the ones who offer longer terms on their receivables. If you'd rather keep doing business with a specific vendor (even if he or she has more stringent policies), you may be able to get them to extend their terms when it would help you keep more cash on hand. You may even be able to use the other vendor as leverage.

During prosperous years it's easy to become a little slack with certain customers, and allow them to stretch out their payments beyond you're agreed upon terms.

It's been said that difficult times don't necessarily build character... but rather reveal what's already there.

Best wishes running your business during these difficult times. You have my utmost respect for being in business in the first place. The best part of my work as a payment processing consultant is getting to interact with America's finest - the millions of small business owners who are America's real heroes, day in and day out.

Until next time....

Virgil Stanphill works as a Consultant in the Payment Processing Industry. His company takes away the fear of taking checks and offers satisfaction guaranteed credit card processing. If you want to qualify for some of the best credit card processing programs in the industry you can visit his blog andlearn more here.

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