Ways to Reduce Costs and Increase Cash FlowWhen business is strong, sometimes we forget to be frugal, but we all remember the "bad days" of the housing recession in the early 1990s. You don't want to be scrambling to "do something" if you're strapped for cash. If everything is going well, why not cut some costs and put more money in your pocket? There are two main rules, used by all properly run businesses, from single-appraiser companies to Fortune 500 companies: 1. Pay your bills only when they are due.2. Get your income as quickly as possible. Fortunately for real estate agents, most costs are variable. For example, if your work volume decreases, your shared work for photo processing and grading fees also decreases. But fixed costs, such as rent and support staff, can lead to financial problems when evaluation assignments run out quickly.Cash Management1. Don't pay any bills early. Do not pay any bill before it is due. See who has late fees and who doesn't. Send checks on Friday to take advantage of the weekend float.2. Exercise dormant lines of credit. It's common for business owners to set up lines of credit that they don't use. The bank may abandon your line of credit if it is not used for a certain period of time, so be sure to check their terms of use. If there is an annual cost, say 1%, many business owners consider giving up a line of credit. But remember the banking industry rule: if you really need the money, you probably won't qualify for the loan.3. If you don't have a line of credit, establish one now. Check around for competitive rates. It's much cheaper than using credit cards if you're really strapped for cash.4. Closely monitor your three sources of cash: - Sales in progress, not yet finalized - Sales invoiced, but not yet collected - Invoices paid: cash on hand5. Complete and invoice assessments as quickly as possible. The sooner they are billed, the sooner they will be paid. We are all tempted to “let work fill the available time.” But this delays payment of your bill. If they don't have the appraisal, they won't pay the bill.6. Offer your associates a higher fee split or reduced office costs if they are willing to wait to get paid until you get paid. This policy can be of substantial help in resolving cash flow issues, as the largest percentage of expenses is labor..