Cash flow. It comes, it goes out. From what I’ve learned so far, money doesn’t like entitlement or duration.

What I mean is this: my aunt has worked at McDonald’s for 15 years. She’s never received a raise. Management has even asked her to accept a raise. Constantly. She won’t budge. So she has been making a living on $8.50 an hour for 15 years.

What money likes is smart movement. Taking smart initiatives to show money that you’re financially competent, and ready to give it a nice and comfortable home.

(Yes, I’ve given money a personality. Ever since I did, money has come into my life far more frequently than it did when I was 17.)

When I was idle, managing money for self was easy as it were pennies that needs to be looked after until I got married and had to look for a money-making source – a job. It was that time when I started managing cash for two idiots who fell into never ending love & never staying money. This was when I needed some help to manage money more efficiently. Luckily today, there are smart-ass-phones with smart-apps that do most of the accounting and managing part themselves.

But, when you run a business that needs to manage cash inflow-outflow on daily basis, you need to step on one-level higher.


Photo by stevepb, CC0 1.0

Here are several ways you can step on that one higher level with minimal headaches on your part.

1. Store Cash In Interest-Earning Accounts

The number one way to make great strides in passive income, is to open interest-earning accounts at your bank.

I don’t know about you, but that’s something I learned about when I was 17.

What I didn’t know at the time, was to look for annual percentage yields to determine which account pays the most interest over time. Otherwise called “the rate of return on investment”.

Like I said, I didn’t know that at the time. And guess what? The interest you earn on accounts? It’s considered income! So start saving.

2. Build a Cash Flow Budget

You can’t successfully manage (or rapidly increase) cash flow without analysing that cash flow. Setting up a projected budget (that lead up to a quarter, 6 months, or a full year ahead of time) allows you to… Well, you know what budgets are.

3. Maintain Reserves

With funds in your reserves, cash shortfalls become a minor hindrance. Instead of making you akin to being a chicken with its head cut off.

As Kiplinger reported, Microsoft bought Skype for $8.5 billion thanks to the cash reserves Microsoft had.

Just how much depends entirely on your needs. Some say anywhere between fifteen to fifty percent “just for rainy days”.

4. Avoid Venture Capital Companies

For one reason (that’s rather quite simple): the price they demand in return? You’re bound to hand over a MONUMENTAL chunk of equity. As if that weren’t enough, usually they’re persistent on pushing a date by which your venture has to be sold.

Probably back to yourself or to outside companies and third-party businesses.

Why do they do this? Simple! Their own funds come from extremely filthy-rich people. Far as I know, the affluent didn’t get to the point of dominating the world by not securing “a piece of the pie”.

This, effectively, turns venture capital companies into sharks. They will be ruthless in acquiring their part of the action. Investors are more in love with making money than with their spouses (so I’ve heard).

You’ve heard the phrase “There’s a lot of fish in the sea.” That applies to business, too. A lot of small fish for whales and sharks to feast on. If those fish aren’t smart.

5. Offer Discounts

At a glance, discounts seem the opposite of cash flow. On the contrary. The more discounts you offer, the more payments you’ll be able to efficiently collect.

And collect them much faster – as opposed to clients or customers sitting on the fence about your service or product. Once they see the same or equivalent offer at a discount… That’s money in your pocket on a quicker basis.

6. Collect Late Payments (With Interest!)

Ah, the other ends of the spectrum. The “small print” of the discount so many people flocked over… Came with an interest rate. If your customers don’t pay the interest rate, you’ve more than doubled the investment you made by offering your discount!

In order to reap rewards–and make bushels of cash–that the 5% do, you’ve got to do what the 5% do. Is this cheap and dirty? Perhaps. Unless you clearly state that the discount comes with interest, which must be paid.

Remember, we’re not trying to con people out of money. These are working people trusting you with fractions of their income. That said,

7. Punish Delinquents

Some (not all) of those working people are trying to “snag a deal,” and once they think they do: you’re done for. Some are going to lie to you and try to buck the system to get out of payment.

Payment they AGREED to pay – on time, no fuss. No hassles. Sometimes, people forget. It’s a busy world out there… And everybody is suffering, it seems. The struggle is very real. So sometimes, leniency is a luxury few businesses afford the working stiff.

But, there are delinquents out there who genuinely just want to steal your time and money. You must show these delinquents that your business isn’t small-time, and that you’re not a push over. Before they hand over their credit card to you, before they buy a single thing

Be sure to (in your discount package) state a clause that requires you to charge an interest rate – to their credit card. If you don’t receive full purchase price by an agreed date.

Before we get hasty here, it should be standard protocol to:

  • Send a form letter 10 days after purchase, asking for due payment.
  • (About 2 weeks later) Send a second follow up later. Demanding payment this time.
  • 3 weeks after that send a third letter demanding payment. The next day? Have your collections clerk give the customer(s) a phone call.
  • This is business, after all.