5 Financial Strategies to Implement Immediately

The economic news over the past few days has shocked businesses and consumers alike. And while Congress, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and others debate the best ways to solve the financial crises faced by big business--the time is right for small business owners to tighten their strategies for the remainder of the year.

Where do you get started? Here are five tips to ensure you understand your finances--and can make informed decisions based on the facts.

1. Revise cash flow for the next six-month period.
   Have you created a cash flow spreadsheet for the next six months? If so, this should be reviewed on a weekly basis to account for any known changes that are taking place or will take place. Do not rely on your budget--instead rely on the current trend of your business to update your cash flow. Act now if there are any negative circumstances.



2. Do a monthly aging of accounts payable.
   If you do not have a monthly aging, begin at once. During challenging financial times, you will find that your customers will begin to pay later and later if given a chance. Stay on top of your receivables. If any are past due 60 days or more, call them. Do not be afraid to obtain liens or get your attorney involved. Your client or customer may not be around for you to collect in the future. In this case, “the squeaky wheel gets oiled.”



3. Review inventory for slow moving items--and turn into cash.
   This is not the time to sit on inventory. Cash is king. Reduce the prices to move out stale or slow turning inventory. You can use that cash to purchase fresh inventory with high demand resulting in increased sales and covering the cost of those markdowns. Old inventory only gets older.



4. Maintain larger cash position to take advantage of sale prices.
   Easier said than done, but if you can, these times will create tremendous purchasing opportunity for you. As many say, the U.S. traditionally has a great economy--things will turn.



5. Use bartering to reduce cash needs.
   Back to the olden days. See if you can trade your goods or services for things that you may need. There are barter organizations that you can join and get a larger universe to barter in. Google them for more information.

Lastly, keep informed on your business--and take a hard look at other areas of your business. While a down economy can be scary--it also presents prime opportunity to take calculated risks.