“Track your cash flow and know your business financial status. It’s a big deal, don’t just take orders and hope you have enough cash.” 7 Secrets Your Steel Suppliers Won’t Tell You, Adam Osborn
The inability to manage cash flow in business will lead to certain failure. There are a few basics to manage cash flow. With negative cash flow you have more cash going out of the business than coming into the business.
This is called being cash flow negative. It’s possible to have negative cash flow with a growing business. In this case, the increased income from growth is not enough to pay the increased expenses to support that growth.
Positive cash flow is when cash coming into the business is more than the expenses of running the business. In fact, being cash flow positive is ideal and will allow the company to operate debt free over time.
In addition, positive cash flow will give you the flexibility of “obtaining a line of credit to hold in reserve, paying invoices early, taking discounts, maintain excellent credit and giving yourself the chance to take advantage of special opportunities that come your way.”
The following are excellent ways to improve cash flow:
Collecting accounts receivables (AR) sooner so you can use the cash for your payables, reducing inventory to free up cash, line of credit (LOC) to use as reserve in case of emergency, buying more often to keep invoices smaller.
Ace Steel Supply works hard to read the steel market so we can offer a stable supply of what you need. Consider looking at a stocking program with us for even more benefits to your business.
When you’re ready to save time, money and make your steel buying easier, give us a call.
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