To stay out of debt you need to make sure that the money coming in is more that enough to cover all the debt you have including paying yourself or employees. If it is not, then that is what you have to work on to keep your business out of debt.
Top 8 ways to increase your cash flow:
- Implement early payment discounts
- Charge late fees
- Keep on top of your accounts receivables and contact anyone who is even a "little" past due.
- Have a credit policy in place, and enforce it.
- Get a signed credit application.
- Check references on all new accounts.
- Get a signed contract or agreement outlining payment terms.
- Set credit limits.
Remember: When you do any of these things, you have to stick to it! Think of it as if it is your teenager in front of you begging for the car keys. Don't Do It!
Check everyones references, and get a signature.
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