Cash flow — the total amount of money that moves in and out of a business ­­— is a major gauge of the financial health of your business. With a healthy cash flow, you are better positioned to handle expenses, invest in new opportunities, and experience growth. Below we’ll go over some strategies that can help your business maintain positive cash flow.

Make Informed Decisions with a Cash-Flow Forecast

Rather than relying on your bank balance to make financial decisions, prepare a cash-flow forecast for six to 18 months out. A cash-flow forecast allows you to estimate how much your cash inflows and outflows will affect your business, including any known payment obligations during that period. This, in turn, helps to be financially prepared when unexpected expenses arise.

Maintain a Weekly Cash-Flow Forecast

While a long-term cash-flow forecast is necessary for a big picture outlook, a weekly cash forecast helps you plan for the short-term. This can be done using something as simple as Excel. Be sure to include all estimated inflows (i.e., customer receipts) and outflows (i.e., payroll). A weekly cash-flow forecast will help to ensure you will have the necessary funds to make payroll and vendor payments.

Strategize Bill Payments

Paying all your business bills at the same time can deplete your cash too quickly. If you deplete your cash too quickly, you might be unable to pay some suppliers, which could possibly endanger your relationships with them. Try paying bills based on priority, and spread out your payment dates. Just be sure you are paying all bills on time in order to avoid late fees.

Negotiate Payments

Don’t discount the power of negotiation when it comes to sustaining positive business cash flow. For instance, when you purchase materials from a supplier, it could be weeks or months before those materials can be turned into a product that can generate income. Instead of paying for the materials upfront, approach your supplier about the possibility of paying for them a week or even a few weeks after you receive them. Keep in mind the likelihood of suppliers agreeing to such an arrangement largely depends on your track record of paying on time.

Take Charge of Receivables

Improve cash flow by being proactive about getting paid. Try these methods to help obtain receivables more quickly:

• Request deposits from customers when taking orders or scheduling a job
• Run sales and promotions strategically to move dated or stale inventory
• Give discounts to customers who have a track record of paying early or on time
• Offer online invoices and payment options
• Remind customers by automatic emails before an invoice is due
• Follow up with a phone call once payment is late

Use a Business Credit Card

Paying for everyday expenses with a business credit card frees up cash and allows you to take advantage of any rewards incentives that can lessen the cost of your purchases, such as a cash-back percentage on certain transactions. Just be diligent of tracking expenses with online banking and your monthly statements.