How Can I Increase Positive Cash Flow?
Your cash reserves continue to be low due to residual effects from the past year and the efforts to stabilize moving forward. Many customers are now accustomed to paying late (if at all), so you’ve had less cash coming in. How can you generate more positive cash flow and maintain it for the long term. Much depends on your internal collection efforts. Do you focus on the accounts that are 30 to 60 days past due, or the ones 90 to 120 days (and more) past due? Age is the greatest deteriorating factor in the collectability of a debt. So if you’re putting your internal energy and dollars into pursuing accounts over 90 days, the 30-to-60-day slow-pays are becoming less collectable by the moment. And you’re in a vicious cycle. The key is pro-activity: Call slow-pays immediately after due date. Reopen the lines of communication to remind customers of their obligation. Identify any service issues and resolve billing disputes. Make payment arrangements. Process full payment over the phone or set up a payment plan. If you don’t try to get partial payment, those dollars may not be available next month. Call habitually slow-paying customers first. You already know it’s not a service issue — they’re just slow to pay. Keep on top of these accounts. Review aging reports weekly. Make sure you know exactly where accounts are falling in the delinquency cycle so that you can prioritize your internal efforts.
