3 Marks of a Company With Solid Cash Flow

One of the more crucial items that should be learned in the world of entrepreneurship is the difference between cash flow and profits.

‘Making lots of money’ still can be a fine ultimate motivator, but being able to maintain good cash flow is especially vital in order to take care of current needs and keep your operation fully operational.

Successful cash flow means you can pay for just about everything you need when you need it, from parts and materials to payroll and power. But getting to this point requires avoiding day-to-day distractions that can interrupt your regular focus on staying financially sound.

Try these strategies to make sure your organization remains focused on cash flow.

Require deposits on larger, custom orders

A security deposit from a customer or can help protect you in the event of a changed or canceled order. Something customized that falls through can be difficult to sell to a different customer if anything ever changes.

Structure payments to benefit you

A customer will likely appreciate as much time as possible to pay things back. But you and your cash flow will appreciate the funds as soon as possible. So especially in the case of a long contract, consider ways that can work better for you such as larger regular payments. At the opposite end, you can offer discounts for rapid payments, something that can also appeal to purchasers.

Avoid change orders

Some are impossible to not include on bigger building projects, but having too many on one project can indicate poor planning or ‘scope creep’ as new elements keep being added to the overall plans. At the same time, not including extra requests or truly necessary changes for a change order can deprive you of possible extra funds.

Overall, good cash flow can be incorporated into your daily organizational efforts. The more you and your employees learn these habits, the easier it can be to help transform cash flow into future profits. For more information on financing options to help preserve or improve your cash flow efforts please contact Uraeus Capital Funding.

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