Whether your business is big or small, having an effective cash flow management is vital if you want your business to survive. But what if you’re a relatively small business with limited financial training? Les Masonson, author of Cash, Cash, Cash: The Three Principles of Business Survival and Success, says cash flow is all about, “getting the money from customers sooner, paying bills at the last possible moment, concentrating money to a single bank account, managing accounts payable, accounts receivable and inventory more effectively, and squeezing every penny out of your daily business.”

Here are a few of Masonson’s tips that could help your business achieve a better cash flow system:

• Fast Collection. In your business, you should collect money as fast as you can. Try to speed up customer orders by having them fax their orders to you.  Send out your invoices the same day goods are shipped, not a week or two later. Indicate on your invoice when payment is due, and specify the penalty interest for late payment.

• Deposit Checks right away. Always deposit checks the same day they are received. Don’t hold checks until the next day because you lose one day’s float.

• Get an account analysis statement. How do you know how much money (bankers refer to this as “balances”) to leave in your checking account to pay for bank’s services? That’s a question that more business owners should be asking themselves.

• Inventory is not cash. Every item you have sitting on your shelf should eventually be transformed into cash in your bank account, and the sooner the better. As long as it’s inventory, it’s basically dead weight. If it is not moving, you’re not having cash flow.

• Licensing Agreements. If you’ve been a clever business person, you have come up with certain ads that have out pulled your competitors. You have developed policies and procedures that have kept your returns and refunds the lowest of any around. Or you may have come up with a money-making technique that is completely unique. If so, you are potentially sitting on fast source of cash.

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