Every company encounters challenging economic times due to the economy. Managing the receivables, payables and cash flow of your business are key components to the overall financial health of your business. It can be difficult but it is possible to manage the unexpected issues which arise from time to time as well as the impact from our economy.
Stay Focused on the Good News: Often, businesses, business owners and the management team get caught in focusing on the bad news circulated in the media regarding the economic environment. It is important to listen and study the economic news and to respond to it accordingly. It is even more important to focus on the positive aspects of your business and not allow the negative news to divert your attention from growing and managing your revenue and financial strength.
Focus on Profitable Service to Your Customer: Make certain that the higher profit areas of the business remain focused on providing “memorable service to the customer”. There may be areas of the business which generate only a small portion of profit compared with other areas. Make certain that the business remains focused on servicing the customer.
Manage Payables and Receivables More Often: If cash flow becomes a challenge, it may be necessary to bill faster (15 days instead of the end of the month) in order to generate revenue faster. Likewise, if you notice customers are paying slower, it may be necessary to touch base with the customer earlier than normal to determine the facts for the slower pay and respond
Remaining focused on generating revenue, increasing profit, managing payables and receivables will surely increase your financial strength. Do your best to remain positive and focus on the good economic news! Avoid the temptation to get pulled into the negative news. Now is a great time to improve your financial strength!