Without a steady flow of cash to cover expenses, your company can quickly stumble.

Cash flow troubles can develop even when sales seem strong. Facing a continuous cash crunch makes it difficult to conduct your business properly. And while it may be tempting to seek out fancy financial formulas for predicting and tracking business cash flow, the basics tend to be plain common sense for most small businesses.

SCORE counselor and certified public accountant Robert Pacios of Auburn points out that, “The object is to make certain that more cash enters your business than exits in your bank account. First, you need to translate sales into real money as quickly as possible. Once you’ve collected the cash, your business needs to guard it. Surprises, such as slow or nonpaying customers and unexpected expenses, are your worst cash flow enemies.”

One way to shift cash to the business is to ask for all or a portion of payment upfront. Asking for at least a deposit in advance is a great way to jump-start cash flow. And if the business establishes the policy fairly and properly, it shouldn’t alienate good customers.

Accepting credit care payments also can help, so owners may want to sign up for a merchant account that allows this. Or, if a business already has one, encourage customers to use this option more often. There is a fee for this, but credit cards are a great way to speed cash into a business account, and the cost is generally small.

Pacios also cautions to manage “receivables” more closely. “This is the money that customers owe for products or services that have been delivered. Create a detailed ‘aging’ schedule of what is owed, by whom, and for how long. Place phone calls to overdue accounts, focusing first on the largest amounts due. Offering a discount can bring quick cash in the door, but play this card only after you’ve called the customer to ask for full payment.”

Finally, don’t overlook the power of an operating budget. Note specific due dates for payables as well as receivables. Although the balance between the two won’t always be predictable, the budget can give a snapshot of where the business stands in cash flow.

Cash flow is just one critical financial issue facing small businesses. To learn more about starting or improving a business, contact SCORE, the Service Corps of Retired Executives.

SCORE is a nonprofit organization of more than 10,500 volunteer business counselors who provide free, confidential counseling and training workshops. Phone L-A SCORE at 782-3708 for additional information and an appointment for counseling.