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Many businesses are still growing in this economic climate, but due to the credit crunch they are not able to finance their growth. Managing cash flow, always important, becomes critical.
More sales should mean more cash flow, but if sales are made on credit, when sales increase, only the accounts receivable increase, not the cash. As inventory is depleted and needs to be replaced, and receivables usually will not be collected until 30, or even 60 to 90 days after the sales, an increase in sales can quickly deplete a firm's cash reserves. Here is some advice for managing your cash flow:
-- Make sure billing, collections, and payables systems are efficient.
-- Keep an eye on customer credit limits.
-- Negotiate pre-New Year settlements with debtors.
-- Share credit terms upfront with customers. 
-- Purchase a cash flow management system.
-- Watch overdue accounts carefully.
-- Manage payables by waiting as long as allowed (without late fees) to pay company bills.
-- Single invoice factoring can speed up cash flow and increase working capital.
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