How to More Easily Manage Cash Flow for Your Business [INFOGRAPHIC]

Every small business has different needs and operations expectations. Managing accounts payable and accounts receivable is a balancing act that accountants perform on a daily basis. Closely monitoring and managing cash flow can help offset payments to venders and overhead expenses and allow you to focus on developing your business.

Business owners should establish habits that allow them to easily track and manage both accounts payable and receivable. Doing so can help reduce the chance of late fees and allow your business to grow more quickly. Read the infographic below from Citizens Bank for 16 different ways to manage cash flow and keep your business in check.

Business Cash Flow Infographic

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Recap: How to Maximize Cash Flow with AP/AR Processes

In order to get more cash on hand to pay your business bills, you need to improve the flow of your Accounts Receivable (AR) and Accounts Payable (AP) and pay attention to your AP/AR Processes.

Account Payable:

  • Compare prices and terms from different suppliers. Re-evaluate the pricing and terms on a regular basis.
  • Try to negotiate for an early payment discount with your suppliers to conserve your cash flow.
  • Ask your suppliers about payment due dates extension so that you can align them with your receivables.
  • Prioritize your outgoing cash flow: Focus on essential bills, like payroll, first.
  • Automate your bill payments to avoid late fees.
  • Consider applying for a business credit card for helping your cash flow.
  • Look for credit card issuers who can accommodate employee credit cards features. Employee credit cards can help you cut paperwork.

Account Receivable:

  • Offer perks to your customers who want to pay for your products/services in advance.
  • Competitive pricing helps cash flow.
  • Use tools to track payments so you know which payments will soon due.
  • Vary payment deadline from client to client to ensure a steady stream of income over time.
  • Have a proper payment collection policy and avoid offering credit extension for clients.
  • Create clear bills and invoices so your customers know exactly how much they have to pay, and when.
  • Instead of bulk, one-off payment, turn payments into installments.

Content was created and provided by Citizens Financial Group.

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