Part 3 of a 3 part series

Warning Signs:

• Significant decrease in working capital.
• Significant decrease in current ratio.
• Significant decrease in quick ratio.
• Sudden unexpected decrease in cash.
• Cash below projected levels.
• Delay in paying bills.
• Lost cash discounts.
• Excessive bank charges.

Steps to Improve: RAISING CASH / INCREASING CASH FLOW

• Establish lines of credit to cover seasonal cash shortfalls prior to the need.
• If needed, refinance loans where it will increase cash flow at reasonable cost.
• Use customer-provided capital: encourage advances, progress payments.
• Use supplier capital: demand extended terms; sell on consignment.
• Use supplier cash: negotiate delayed payment terms.
• Negotiate special terms to stretch cash flow.
• Use third party credit (credit cards, direct finance) instead of house credit if you can.
• Use banks that provide instant credit for charge cards.
• Use customer capital; sell from catalogs.
• Tap your life insurance for last resort financing.