Keep Cash Flowing
Galley Proof
Sept. 22, 2008

Especially during these tough economic times, understanding cash flow is vital to keeping companies afloat.

A recent article in the Printing Industries of New England (PINE) newsletter offered important cash flow tips. According to the article, the Printing Industries of America Financial Ratios show the average receivables turnover is 54 to 55 days. A preferred turnover is about 30 days. PINE offers these tips to improve cash velocity and bring turnover closer to the 30-day ideal:

-Check the credit of every new account.
-Get every order signed before performing any work, especially ordering stock.
-Have your CSRs confirm billing and shipping information
when the order is entered.
-Engage production departments with the goals to produce
the work right and reduce cycle times.
-Bill 100 percent of jobs within 24 hours.
-Schedule flexibility/urgency to enhance cash flow.
-Enlist employee participation to reduce production cycle time.
-Embrace employee training to enhance productivity.
-Develop maintenance programs to improve equipment uptime.
-Use a progressive collections approach — a phone call to the client from the controller when invoices are 10 days past due, a call from the CFO after 20 days, and one from the president or owner at 30 days past due.