In these current difficult economic times, a business can never underestimate the importance of having a cash reserve in the bank. Cash flow is obviously a fundamental aspect of a business â€" one you must treat with great care and seriousness.

Since generating cash to meet overheads, payroll and other monthly expenses can quickly become difficult, Three Peaks hopes to provide some tips to help avoid one of the most common fiscal afflictions facing businesses today â€" insufficient cash flow. Cash flow is notoriously difficult to predict and slow paying customers, unexpected expenses and seasonal dips can quickly turn a positive outlook gloomy.

Know where you stand
When it comes to cash flow, knowledge is power. Cash flow crunches do not appear out of nowhere and they can often be spotted, and avoided, if you know exactly where you stand by using a cash flow statement.

Actively manage outflows
You are in control of accounts payable. When cash is tight, delay payments as much as possible without paying late and avoid late fees.

Streamline monthly expenses
The most obvious way to balance receivables with payables is to simply reduce expenses. Take a look at recurring costs. Even a small reduction can add up to a significant saving over the course of a year.

Stay on top of receivables
There are many steps a business can take to maximise receivables. If the business has outlined payment terms, it is important to stick to them as much as possible. If the policy indicates payment is due at time of service, make sure your staff are trained to ask for payment at the time of service.

Offer a variety of payment options
If a business is not willing to take the risk of offering an early-payment discount, another possibility is to encourage the implementation of debit-orders. Our cash-flow management solutions, with special reference to our leading product, Debitsure, will enhance your cash flow and reduce the risk of bad debt by implementing the collection of regular payments from debtors via debit order.

Revamp collections
Stay on top of collections well before they are overdue. Begin by making sure all billing information is up to date. By maintaining current telephone numbers and address information, a business can speed collections work and reach clients promptly. Wrong contact information or missing information will only add more time to the collection cycle.

Cash-flow can be managed effectively if handled proactively. How proactive is your cash-flow management?