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8 Ways to Increase Cash Flow
By: Tage G. Tracy
Posted: May 31, 2012, from the June 2012 issue of Skin Inc. magazine.
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5. Manage your disbursements cycle. To counteract the selling-cycle cash-consumption machine, skin care facilities need to understand that the disbursement cycle (managing expenditures and cash payments to vendors, employees and other creditors) can be leveraged and managed to be a primary source of cash for your business.
6. Be creative to generate cash. The following three areas offer significant opportunities for creativity when looking to improve cash flows: Turn your assets over more quickly; leverage your vendors, suppliers and financing sources; and manage external sources of cash proactively.
7. Balance the balance sheet. Many spas overlook the concept of properly managing the financial structure of their balance sheets. Your business needs to strike a proper balance between making sure that current assets are financed or supported with current liabilities and making sure that long-term assets are financed or supported with long-term sources of capital.
8. Always think of CART. CART stands for Complete, Accurate, Reliable and Timely. Your facility’s financial and accounting information system needs to produce CART financial information, reports and data that management can use to make informed business decisions.
When you have the proper systems in place and know what to look for, you can keep cash flowing, helping you to grow a successful business.