Q:My business has some financial leaks. How do I improve my cash-flow management?

A: Top-line sales growth can conceal a lot of problems-sometimes too well. When you are managing a growing company, you have to watch expenses carefully. Don't be lulled into complacency by expanding sales. Any time and place you see expenses growing faster than sales, examine costs closely to find places to cut or control them. The key to managing cash shortfalls is to become fully aware of the problem as early as possible. Here are some tips for using cash wisely.

Take full advantage of creditor payment terms. If a payment is due in 30 days, don't pay it in 15.

Use electronic funds transfer to make payments on the due date. You will remain current with suppliers while retaining use of your funds as long as possible.

Communicate with suppliers so they know your financial situation. If you ever need to delay a payment, you'll need their trust and understanding.

Carefully consider vendors' offers of discounts for earlier payments. These can amount to expensive loans to your suppliers, or they may provide you with a chance to reduce overall costs. The devil is in the details.

Don't always focus on the lowest price when choosing suppliers. Sometimes flexible payment terms can improve your cash flow more than a bargain-basement price.

Prepare cash-flow projections for next year, next quarter and, if you're on shaky ground, next week. An accurate cash-flow projection can alert you to trouble well before it strikes.

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