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Cashflow is the lifeblood of any business—the cash that goes in and out of your company determines your financial position. In particular, managing how your cash flows in and out of your bank account depends on how you balance the timing of your cash collections from clients with cash payments to your suppliers.

Encourage your customers to pay you as soon as possible. Here are some tips to increase your cash collections:

• Offer discounts to customers who pay you before due dates.

• Ask customers to make down payments when they order.

• Establish a customer credit policy that will determine credit limits.

• Mark down slow-moving inventory to convert to cash quickly.

• Monitor receivables regularly by identifying those that are about to become due and those that have become overdue. These items require immediate action.