The Challenges of Cash Flow Assignment Example | Topics and Well Written Essays - 500 words

The Challenges of Cash Flow - Assignment ExampleThis ordain enable customers to mail payments and checks processed by the banking company as quickly as possible. Companies should use one bank to centralize and easily manage their exchange.Tightening credit requirements It is a marketing strategy to transmit credit to customers to increase sales. Businesses often have to extend credit to customers, particularly when starting out or growing. Businesses should as well as scrutinize individual customers to assess the risks relate to selling to customers on credit. Additionally, companies should accept credit cards although it will attract a small percentage of interest (Linzer, 2006).Increasing sales increased sales would defiantly increase cash in rate of flow. In order to achieve this objective, a company should sell more goods to existing customers and get new customers through advertizement of products and services (Jones, 2008).Pricing discounts discounts on accounts rece ivable motivate customers to pay early in order to claim the discount offered. This will definitely improve cash inflow. However, this will reduce the firms profit margin. A company may delay payments to the suppliers as a counteraction. This must be done with a lot of precaution so as not to affect the firms credit rating.Securing loans bank overdraft or other short-term loans can also be used to solve short-term cash flow problems (Linzer, 2006). A long-term amortized loan is also another way to solve cash flow during financial difficulties but it should sum up principal and interest until the loan is finally settled.Set cash flow targets- proper cash flow projections will enable your firm to properly estimate and project the required cash flow. The use of cash flow analysis tools like use of cash reckon and projected cash flow statement are also effective (Jones, 2008).Make payment by your customers as