3 Making Your Equity Work For You - 4 Tips On Controlling Your Daily Company Expenditure

Cash flow is the fuel that keeps the company engine running. It is a critical component of the success of any business. Having profit on paper without operating cash will not do the company any good and can in fact lead to bankruptcy. Without cash, the business cannot handle its day-to-day operations and cannot make investments that are necessary for the growth of every business. To make sure that your business is successful, you must ensure that the cash coming in is more than what is going out. Studies have shown that one of the leading reasons that businesses fail is due to cash flow problems. Cash flow comes in two kinds, positive cash flow where the cash received is more than the cash leaving the business, and negative cash flow where the outflow is more than the cash coming in. Negative cash flow can spell doom for a business but there are tips that can help to prevent this situation. By following the tips, you can manage your cash flow and this will help to grow your business.

1. Collecting receivables You have to make sure that you have a good system of collecting and processing receivables. Make it easy for your customers to pay you by providing convenient payment options. If you have customers who are far from you, make it easy for them to pay using convenient options like the depository transfer checks. Give incentives to your customers to pay early by offering prompt payment discounts, and try to avoid offering credit to customers with a poor payment record. 2. Increase sales Come up with promotions and advertising techniques that will increase your sales. You should constantly try to increase your customer base. The more products or services you can sell, the more cash you will have coming into the business. You should also consider selling more goods and services to your existing customers. This might actually be easier and more cost effective than trying to attract new customers. When increasing your sales, try to avoid a scenario where you increase the account receivables.
3. Credit requirements While it is often necessary to give credit to customers, you need to be careful about who you are offering the credit to. Make sure that you carry out research and check references to avoid the risk of extending credit to customers who do not pay their bills on time. If you are dealing with a business that has cash flow problems, you can expect delays in payment. A safer option to giving credit is accepting credit card payments. While you may end up spending a percentage of the sale on the payment, at least you are guaranteed of timely payment. 
4. Monitor expenditure You need to keep an eye on all the cash that is coming in and going out on a daily basis. Do not wait until the end of the month to try to figure out your expenditure. When you monitor the money on a daily basis, you can know where spending can be controlled. The daily expenses might seem like a small amount but they add up and can lead to cash flow problems. Make sure that your accountant questions all the spending made by each team and where possible, look for cheaper options to help in saving costs. If your business is experiencing a problem with short-term cash flow, you should consider taking out a loan. A number of financial institutions offer equity loans or credit lines that can help businesses to remain afloat. The cash from the loan can help to ensure that you have enough operating cash as you wait for your creditors to pay.

Author Bio:
 Susanna is a blogger who has written several articles about different types of loans. She offers advice to business owners about the benefits of private equity and how it can grow their business. She also works as a private consultant to small business owners.