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.
