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7 Tips When Faced With a Cash Shortfall

1. Cash/Credit
  • Make deposits as often as possible.
  • Monitor your account to avoid nasty surprises such as the postdated cheque you forgot about.

2. Inventory/Materials

  • Slow down purchases or production until inventories return to normal levels.
  • Consider price discounts to move inventory and keep cash flowing.

3. Product or Service

  • Ensure product/service is priced competitively.
  • Ensure your price includes a profit margin.

4. Sales

  • If sales are declining, consider reducing the selling price of your product or service to increase your volume or consider reducing your costs.

5.Accounts Receivable

  • Match customers collection terms with your creditor terms so that cash comes in at the same time it goes out.
  • Contact customers and let them know payment is overdue.
  • Review your credit terms.
  • Watch specific accounts: customers may be having financial trouble.

6. Expenses

  • Cut down on personal expenses as this may be a cash drain.

7. Seasonal Changes

  • Obtain a business operating line or overdraft to handle these times.

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