Delaying Cash Outflows

Cash outflows are the movement of money out of your business. A few examples of cash outflows are paying expenses, purchasing property or equipment, or paying back a bank loan.

The key to improving your cash flow with regard to cash outflows is to delay all outflows of cash as long as you possibly can. However, you still need to meet all your outflow obligations on time. Delaying cash outflows makes it possible for you to maximize the benefits of each dollar in your own cash flow. Seeing the benefit of delaying your cash outflows is the first step in managing them.

The proper management of cash outflows requires you to track and manage your business liabilities. Managing your cash outflows also requires that you follow one simple, but basic rule: Pay your bills on time, but never pay your bills before they are due.