Your company’s success is highly dependent on steady cash flow. Healthy liquidity doesn’t only allow you to handle necessary transactions, but it also sends a strong signal about your business’s condition and stability. Use the following four pointers to stay on top of managing your capital.

1. Plan for the Future

Credit is a critical tool for keeping your cash flowing when money is right. However, the worst time to ask for a loan is when you need it most because your business might not appear to be a stable investment.

Lenders need to see that you’re responsible, and one of the ways you do that is by having a solid business plan with a history of financial statements. You look more creditworthy when you do this. Plus, you can anticipate lean times before they begin and request a loan when you’re not in sore straits.

2. Maintain Solid Relationships with Lenders

One of the best ways to have access to financing is to build connections with lenders before you need their help. You can start accounts or take out secured loans to create a relationship. Then, your lender won’t be as hesitant to extend credit when necessary.

It’s also wise to discuss your circumstances with a loan officer or representative well before you require financing. In some cases, you can secure a commitment to a future loan on more favorable terms.

3. Manage Your Inventory Well

Lenders pay close attention to how you manage your inventory. Sufficient stock shows that you have something to sell that you’ll use to repay the loan. Additionally, inventory can serve as security that the lender can sell if you default.

Of course, you don’t want to overbuy, which can be a sign of poor planning. Consider investing in inventory management software to keep your stockroom in check and put lenders at ease.

4. Pay Attention to Accounts Receivable

Your cash comes in through accounts receivable, so never neglect this vital department. Maintain thorough and accurate records to demonstrate how revenue keeps moving through your organization.

Consider incentivizing customers for early or automatic payments, which helps keep your reserves in good standing. You can also use invoices and accounts receivable to qualify for lines of credit, so solid practices in these areas can ensure that you have cash flow when it’s essential.

Cash is still king in business, so how you manage your money makes a world of difference to your company’s viability. Apply the preceding suggestions to make your resources work for you at the right times.