Businesses can take several steps to improve liquidity:
Manage Receivables: Speed up the collection of receivables by offering discounts for early payments or implementing stricter credit policies. Optimize Inventory: Reduce excess inventory to free up cash. This can be achieved through better demand forecasting and just-in-time inventory systems. Control Expenses: Reduce unnecessary expenses and negotiate better terms with suppliers to manage outgoing cash flow more effectively. Secure Short-term Financing: Establish lines of credit or short-term loans to ensure access to cash when needed.