Part 3 of a 3 part series
- Significant decrease in working capital.
- Significant decrease in current ratio.
- Significant decrease in quick ratio.
- Sudden unexpected decrease in cash.
- Cash below projected levels.
- Delay in paying bills.
- Lost cash discounts.
- Excessive bank charges.
Steps to Improve: RAISING CASH / INCREASING CASH FLOW
- Establish lines of credit to cover seasonal cash shortfalls prior to the need.
- If needed, refinance loans where it will increase cash flow at reasonable cost.
- Use customer-provided capital: Encourage advances, progress payments.
- Use supplier capital: Demand extended terms; sell on consignment.
- Use supplier cash: Negotiate delayed payment terms.
- Negotiate special terms to stretch cash flow.
- Use third party credit (credit cards, direct finance) instead of house credit if you can.
- Use banks that provide instant credit for charge cards.
- Use customer capital; sell from catalogs.
- Tap your life insurance for last resort financing.