February 22, 2005 -- A critical part of business management is regular cash flow forecasting.  This enables you to monitor fluctuations and to make adjustments to cover expenses.  You must be able to project, as best as you can, expected cash flow in and out of your business for any given period.  Businesses should also have an emergency fund.

Using payment incentives can be an effective way to reduce collection time, and reduce your float period.  A 1% to 2% discount for payment in ten days motivates many customers to pay quickly.

Avoid using credit cards to fund business expenses.  In many cases, interest rates are between 15% to 20%.  A line of credit is an option and preferable to even a business loan.  When money transfers to your account, interest will accrue at that point.  Why pay interest on $25,000 when you have only used $10,000?

Timing is very important when using credit.  You have to be very definitive about your money needs.  For more information on managing your cash flow, contact Susanne Spinell Shuster at 215-564-1900 .

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