Running out of cash can give you hyper-stress and sleepless nights.
This happens when you don’t have enough revenue in slow times, haven’t saved enough to cover those times, an employee is stealing from you every week or you don’t set prices to make a profit.
Here are 4 ways our friend Ruth King advises to prevent running out of cash:
- Be your own banker. Use a savings account to transfer money each week. Save 1% of every check that comes in the door. Transfer it when you make the deposit.
This is easy to do and easy NOT to do. Over the years this 1% adds up to a lot of dollars to cover payroll or other expenses.
- Watch your accounts receivable. If an invoice is to be paid in 30 days, call your account on the 31st day with a friendly reminder to pay by credit or debit card.
- Make it a policy to get payment at the time of order or at least a deposit. You can also charge a 1.5% carrying charge per month on delinquent accounts.
- Weekly cash flow reports will track incoming and outgoing dollars every week. Then predict cash inflows and outgoes for the next week. Email Ruth for a weekly cash flow report (firstname.lastname@example.org).
We share such ideas in “Maverick Entrepreneurs’ Million Dollar Strategies.”
For a $20 personally autographed copy, contact us at 803-359-7633.
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