Short Term Cash

All businesses, especially rapidly growing or new businesses, hit speed bumps that look like mountains, because they need short term cash flow to meet payroll, pay suppliers, and generally keep the wheels on.

Here are powerful tactics that can generate short-term cash.

If you issue quotes or price estimates to your customers, you may have filing cabinets full of old quotes that weren’t accepted, that were rejected but may still have life in them, or that were never followed up (this is the most common type).

One service company had outstanding quotes that exceeded the prior year’s sales total. All the sales person had to do was pick up the phone, call the customers and generate sales. Following up on dormant quotes is the fastest and easiest way to generate sales and short-term cash.

Have you ever hired a contractor to do work on your house and then received an invoice four months later. That’s one busy contractor. And, one lousy business model. Issue your invoices as soon as possible so that you get in the payment queue. I haven’t met too many people that pay without an invoice.

If you complete work on the second of the month, send an invoice to your customer at the end of the month, get paid 30 to 45 days later, then you’ve waited almost 75 days to get paid! Invoice as soon as you complete the work.

Offer ‘prompt payment discounts’ for early payments. A discount of 2% for immediate payment can accelerate your payment receipt by 30 or 60 days. If you accelerate your payment process by 30 days on average, you will increase your bank account by one-twelfth of your annual sales. That’s right, that’s a lot of cash.

Cash is king. You can be your own banker by generating your own cash. Then, you can use that working capital to create even more sales.

Tough Question

What is the dollar value of your open, outstanding and neglected quotes?

From The Piggy Bank

Following up the requests from your customers and prospects can help to keep your piggy bank full.