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Cashflow Management Checklist

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Use this list to identify that you have mastered the tasks of cashflow management.

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Check out the cashflow position before committing to any new expenditure or increases in overheads consider using other methods such as leasing to finance assets.

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Keep on top of your cashflow position, monitor at least weekly if not daily and revise the budget to anticipate potential cash shortages.

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Shop around for competitive prices for items you want to purchase, be a good buyer.

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Cut unnecessary costs and negotiate generous payment periods and short delivery lead-times where appropriate.

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Use a stock control system to allow you to minimise cash tied up in stock.

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Control and reduce the amount of cash owed to you by restricting credit periods, invoicing promptly and chasing payments vigorously or look at factoring the debts .

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Allow for short-term fluctuations which do not show up on monthly or weekly budgets.

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When the cashflow becomes critical be prepared to trade off profitability and other business objectives to keep on track.

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Organise additional funding before you need it, have it on standby just in case.

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Look at generating short-term sales income by offering incentives,  like offering discounts for cash payment, or incentives to bring forward purchases.

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Be prepared to turn down orders if you can't finance them. You could  negotiate deposits or stage payments for large orders and long-term contracts, to give you cash flow.

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Sell unproductive or assets not required and discontinue business lines which give negative cashflow.

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Develop warning systems to identify where delays or unexpected changes could cause the business to run out of money.

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Build relationships with both your financiers and suppliers so they will extend extra credit when it is needed.

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