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Being small business owner we are aware of the fact that a smooth and unambiguous cash flow is negligible for the survival of our business. The core of successful cash flow management is to be able to regulate the flow of money in and out of your small business. Today we will discuss some effective tips that will help you develop an increased yet consistent cash flow thus making it easier to plan and budget for future growth.

Organize Billing Schedule:

The faster your receivables turn over, the more capital you'll be able to spend on growing your business. You can use some accounting software such as QuickBooks Pro or Peachtree Complete Plus Time & Billing to bill early and often and acting immediately on overdue accounts.

Early Payment Incentives:

If your suppliers offer you a discount for paying early (usually within two weeks of receiving the bill), take them up on it. If your suppliers don't offer this kind of incentive, ask for it; they may be willing to offer the discount in return for speeding up their receivables.

Balance your Client Base:

Look for ways to convert your clients to a retainer relationship, where they pay you a set amount of money per month for a certain number of services. You can offer them some kind of incentive such as value-added services, a discount etc to encourage them to shift to a retainer. This might reduce your profit margin, but it will help make your cash flow more predictable.

Check your Pricing:

Many small businesses hesitate to increase their rates because they're afraid they'll lose customers. However, customers actually expect their suppliers to institute small, regular price hikes. If your competitors are charging higher prices, you should too.

Don't buy all in one place:

You can save money by splitting your business between suppliers. For example, you can buy computer hardware from a value-added reseller and other items such as printer cartridges, cables, or off-the-shelf software from a mail order catalog or other price merchant.

Buy Cooperative :

You can also save money on supplies by buying supplies like floppy disks and printer paper in bulk and then divvying them up amongst a number of colleagues including you.

Decelerate Cash Flow:

Decelerating your cash flow is another way to preserve your capital. You can delay payments to vendors by postponing payment to the extent possible. Try to push the envelope further by negotiating a 45 days payment cycle or further. Negotiate your terms with regular vendors and come up with a more beneficial term for you.

Strategic Product Alliance :

Entering into a product alliance with another business allows you to offer your partner's products and services to your existing customers, while your alliance partner sells your business's products and services to its customers. As a result, you are able to expand your product line without any of the costs associated with it. Remember, the strategic alliance must be win-win in order to be sustainable and mutually beneficial.

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