Cash (3 of 3): Raising Cash/Increasing Cash Flow - John M. Leask II CPA/ABV, CVA

Cash

Part 3 of a 3 part series

Warning Signs:

    • 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.

Back to The Business Doctor

>>Cash (1 of 3): Preventing Loss
>>Cash (2 of 3): Speeding Cash Flow/Cutting Costs
>>Cash (3 of 3): Raising Cash/Increasing Cash Flow