Let's face it. Cash flow is the lifeblood of businesses. Many businesses are either well into the budgeting process for 2017, or just starting down the tedious path. Regardless of where you are in the process, it's important to evaluate cash flow in terms of its impact on your business, both positive and negative. Understanding the ins and outs of your cash flow is critical to the future growth of your business. Here are seven tips to get you thinking about where to start.

1) Evaluate Current Cash Flow--Achieving a positive cash flow is an intentional effort that doesn't happen by chance. Start the process by first understanding the cash flows of your business by preparing a cash flow forecast. This forecast summarizes all cash inflows and outflows of your business and should be consistently updated based on the cash position of the business.

One popular method is the 13-week rolling cash flow forecast. This forecast will enable you to be prepared for historically difficult periods or seasonal trends. If your business is seasonal, be sure to review the cash flows of your business through this lens, to help prepare for future dips. Keeping timely and accurate accounting records for your business allows you to build a forecast based on historical results.

Organizations of all sizes should plan to forecast on cash flow, a responsibility typically delegated to an accountant. Small to mid-size businesses that do not have internal staff can rely on an outsourced agency such as Signature Analytics, which provides ongoing accounting support and financial analysis for businesses nationwide

2) Tighten Up Net Terms on Invoices and Late Fees--If your net terms are 45, 60, or 90 days out, it's time to re-evaluate. Consider scaling back to net 30 or even net 15 with the addition of a late fee, based on percentage of the invoice. Of course, making any changes here requires thoughtful communications with your customers, in addition to well-planned timelines. Find the balance between being easy to work with and doing what's best for your business.

Even with tighter terms, some customers will fall behind on their payments. Have a plan to actively manage your accounts receivable and communicate regularly with these customers. Sending invoices electronically is the fastest delivery. From there, plan on a standard cadence for follow up, e.g. 10 and 20-day status requests; then a 30-day follow-up email with a collections phone call.

3) Set-up Automatic Payments for Customer Invoices--Getting customers set up to pay by credit card, especially for recurring fees, is a great way to ensure timely payments. There are plenty of secure sites for businesses to use, and you can even set it up to have the funds transfer directly to your bank account. Consider offering these customers a small discount if they pay early, say net 10 instead of a standard net 30. Your customer's ability to pay in a variety of ways will also make it easier for them to pay early.

4) Get the Best Terms on Invoices Owed--Get to know your vendors and negotiate the best terms on invoices you owe, with the longest possible timeframes. Many vendors will offer terms of at least net 30 and some will even extend terms to 45 or 60 days.

5) Avoid Shortfalls by Having Reserve Cash-- To save some reserve dollars for a rainy day, be sure to look at your cash flow forecast as well as how you budget spending. The two should align and create a pivot point for you to determine if you need 3 to 9 months of reserve cash. This is a reasonable goal to set and will help in any seasonal or down-trend months.

6) Require Deposits for Services -- Deposits for the kickoff of a project or service are a helpful way to provide a, albeit smaller but steady, flow of incoming cash.

7) Develop Key Performance Indicators (KPIs) for Cash Flow--An example here is tracking the average days outstanding in Accounts Receivable in which continued improvement over time will increase cash flows of the business.

As you plan for 2017 and beyond, adopt the old adage "cash is king" and make understanding and improving your cash flow a priority. Your business will run better, and you'll have greater peace of mind with a plan for the future.