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Here are some tips to turbo-charge your cash flow.

Offer discounts for prompt payment.

If your profit margin can handle it, you could offer a small percentage — say two percent — for immediate payment. This is the reverse of a penalty for slow payment, and could actually be factored into your original price.

Offer partial credit
If slow-paying customers are chronic, it may be worthwhile to meet them halfway. Provide credit to qualified customers, but only if they give you a 50 percent down payment immediately. Set up an interest schedule. You might consider offering this only to the more delinquent of the payors.

Take credit cards
Many businesses would rather pay you up-front than deal with the administrative hassle of paying individual bills. With automated card transactions, your account is credited the same day. Check with your business association about lower rates for members, or consider services such as PayPal which give you the option of offering credit card payment even if you don’t have your own account.

Get cash on delivery
Some customers actually prefer to pay cash up front. Don’t automatically offer credit, even for large items, but establish a payment on delivery policy.

Get cash up front
In today’s online shopping world, people are used to paying prior to shipment. Establish this as your policy. If necessary, consider combining this with the price discount.

These tips will help you get your cash in hand, but even if you do continue to offer credit, you can get your money in the bank faster. Next time, we’ll show you ways to get cash based on your receivables.

The Small Business Funding Center grants permission to reproduce this article in its entirety only, with credit given to the Small Business Funding Center at

For information on grants & loans for your new or existing business call 1-800-658-9792 . Or write us at Small Business Funding Centre 1500 Bank Street, Room 425, Ottawa Canada K1H 1B8 or e-mail us.


This Financial Management article was written by The Small Business Funding Centre on 1/13/2006

The SBFC’s mandate is to help new and existing Canadian small businesses gain access to government funding: helping young entrepreneurs gain the knowledge and tools to get funding to help start-up their own practice. Coincidently, they also have an interesting and educational monthly newsletter/online database containing hundreds of articles related to various business topics and related issues.