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Ways to Cure Cash Flow Problems

2. Invoice Faster, Pay Bills Slower

When cash is flowing out faster than it’s coming in, you have to do whatever you can to reverse the trend. Because ultimately you want the cash flowing out slower than it’s coming in.

One easy way to do this is to collect on invoices faster, then “float” your money.

So, for instance:

If you normally invoice on Net 30 terms, see if you can get your clients to pay sooner. Give them a small discount for paying the full amount up front or within a shorter time frame, say 14 days.

The faster you get paid, the better your cash flow will be.

The second step of the process is to keep your money as long as possible. So that means you will want to try to delay paying your vendors.

You can ask for terms or ask for an extension on a specific invoice. Or if you’d rather not negotiate with vendors, you might try paying with a credit card.

By paying with a credit card, you will automatically have an extra 25-30 days to pay. Since credit cards are not accessible here in some part of Africa, you can consider a postdated checks (Just make sure you have enough cash to pay off the balance at the end of the billing cycle.)

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Anthony Ansong

Ceo - Ansong Holdings LLC Co-Founder & Editor Light Magazine Africa Author of Children Book Entrepreneur

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