Cash Flow Tips Part 4: Loans, Sales, Payables and Investing

Short term business loan

Sometimes it’s necessary to take out a short term business loan in order to cover short term cash flow problems. Equity loans and revolving credit lines are a couple types of credit used in such circumstances.

Increase your sales

While increasing your sales may appear to increase your cash flow, this is really only true if the sales are paid in cash. If your sales are made on credit, then when your sales increase, your accounts receivables increase, not your cash. And if you do not have a sufficient cash reserve this can be an especially troubling situation, particularly when your receivables won’t be collected until 30 days following sales. Therefore the greater you increases sales on credit, the greater the opportunity for depleting your cash reserves. So exercise caution.

Manage your payables

A key cash flow management strategy is to focus on bringing in cash at a fast, steady rate, and then retain that cash as long as possible so as to meet your payables obligations. One part of this strategy that is often encouraged is to pay your bills on the latest date allowable before incurring late fees or interest charges. Prioritize which vendors you must pay first, and in some cases you can negotiate with some vendors to extend payment terms.

Investing spare cash

If your cash flow is stable, you might want to consider investing your surplus. Doing so will earn you additional interest income.

The Jayaram Law routinely and successfully assists its clients in their business-to-business (b2b) collection needs.  We take pride in obtaining payment on accounts receivables without fracturing critical business relationships or engaging in time-consuming and costly litigation efforts.

If you need business debt collection services conducted in a professional manner, contact our B2B (business-to-business) debt collection law firm by calling 312.454.2859 or visiting