Utah State

Section 3

Cash Flow

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Cash Saving Ideas

Cash flow again? Well I warned you that you would deal with this the entire course. It is the single most important aspect of turning your business around and bringing it back from the brink so here are some more things to think about and to try. Come up with your own ideas as well.

 Make a goal to cut one expense per week. You don't have to do it alone. Work with your team. Many times there are expenses that are tradition and go by unnoticed or there are expenses that can be cut and benefit the business as a result. Here are a couple of examples...

 Back in the day, I worked for a public accounting office and was assigned to assist the partner over governmental audits. That partner always assigned me to audit the Cash section. I was going through an entity's process and had to observe how they took cash and what they did with it.

 The clerk would take the payment and write out a four copy receipt. One copy would go to the client, one to Accounts Recievable and one was kept with cash. The last of the four was shredded. I asked why. The clerk told me they had always done it that way. We asked her supervisor and got the same response. The supervisor called a lady that had her position previously and had retired. The answer? One time, many years ago, the retired lady called to order 3 copy NCR paper and all they had in stock was 4 copy. Since that time they had continued to waste money for the extra copy.

 The moral of the story? Question EVERYTHING.

 Another business I worked with processed pine and made different items. I was there to help with computer payroll problem one day and got a tour of the facility. There was a big pile of nearly finished product being sold for firewood. I told the employee that it looked like pretty fancy firewood. He said it didn't meet their quality standard for finished product. All that time and effort wasted. He said, If they inspected the lumber before processing they could send the bad wood straight to the firewood pile but that wasn't how they did things. I asked why not. He told me the owner was the one that designed the process. We had a talk with the owner.

 The moral of the story? Employees see things you don't.

 Assignment: Meet with your employees and look for at least one cost (cash) saving measure. Implement it and tell your counselor what you did. If you don't have employees, ask your family, friends or clients what they see that you could change even if it's just to save a few penneys and do it. Make this a weekly event.

 Assignment: Reward the employee, client, friend or whoever came up with the cost saving idea. If it's an employee, reward them in front of their peers. Don't give raises. Give certificates for movie tickets or a dinner for them and their spouse. One time non-monetary items are best. Make this a habit too. Report the reward to your counselor.

 Assignment: Download the idea sheet to the right and read through it. Report to your counselor the items that you are going to try and also give them an idea of your own to be added to this website.