3. Rethink your business model. There may be ways you are doing business that are slowing the cash conversion cycle. For instance, many companies send out invoices every 30 days. Speeding that up to every 15 days will get cash into your company more quickly.
Not accepting credit cards can also slow the cash conversion cycle. One company I know, which makes printed circuit boards, found that it was easier and faster for clients at big corporations to buy its wares on their corporate cards -- which often had a $5,000 limit -- than to get a purchase order prepared. That sped up the cash conversion cycle dramatically.
At my own business, I ask a number of customers to pay in advance, which gives them special access to our offerings, as well as discounts. In return, this ensures that I always have a year's worth of payroll in the bank, in case of emergency.
Look for ways to speed delivery of your product or service, too. The sooner you get what you sell to customers, the quicker you can send out invoices and get paid.
Each business has unique opportunities to speed up cash flow. Uncovering the best ones will help you unlock the growth potential of your business.