1. Pay attention to your market and have different products or services that complement one another. An example is banks whereby they have different kinds of accounts so that a wide clientele is served.
2. If you usually pay cash up front for goods and services, ask your suppliers and service providers to bill you. Doing so will help even out cash flow by giving you more time to sell the merchandise or collect from your customers before paying your bills. Have a system to ensure they are paid on time to maintain good relationships.
3. Always ask for cash up front. If you give credit, make sure you have a clear credit policy which outlines late payment fees and any interest that may accrue with delayed payments. Get invoices and if possible time the receipt of payments to coincide with when you need to pay your bills.
4. Thank goodness for the digital age, you can email your invoices to the client. Schedule when payments are due and give a check via call or email to delaying clients. Don't let the bills accrue too much because it will be difficult to collect. Keep communication open with the client and offer help where you can.
5. Depending on your business, you can also consider working with your bank to arrange an overdraft for you. This is better than a loan and will help during the down time. For this method to work for you, you ought to be banking the money you receive so that your banker has a history and can trust you with an overdraft. Most banks will require some security so talk with your bank and see what will work best.
Just like you have sales targets, have collection targets as part of your debt collection policy.
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