Liquidity is the ability to increase your cash flow through the sale of assets that are not in use, or are no longer required. Excess inventory, overruns on the production line and purchasing mistakes can all be sold to improve your cash position. An asset-heavy, cash-light financial statement spells financial trouble in the short run.

Assets are included in a company's financial statements based on their purchased price. The cash flow statement keeps a record of the cash available to run the business. Tap into the cash held in your assets with the help of liquidity consultants. Consider both fixed and investment assets as opportunities to improve your cash position. Here's how to use liquidity to improve your bottom line:

1. Manage your company's liquidity with sophisticated software tools.

2. Implement liquidity advice to improve cash flow and prepare for hard financial times.

3. Improve your investment liquidity position with help from top industry experts.

Action Steps
The best contacts and resources to help you get it done

Purchase a liquidity information management software program

Improve the cash flow of your firm through careful management of your liquidity information. Use liquidity software to properly report and analyze cash flow data. Several great software tools are available to make this task easier to manage.

I recommend: CashTech is an international firm with a well-known software program used to help medium to large firms with liquidity management. Polaris provides a software product that helps large companies assess their liquidity position through the management of inventory and asset depreciation.

Utilize a liquidity firm for the best financial results

Hire a liquidity firm to maximize your business' returnable dollar value without investing in significant overhead costs. These firms help with liquidity by evaluating your assets, determining their liquid value and arranging for their sale.

I recommend: Liquidity Services can help you with all phases of asset liquidation, from developing a sales and marketing plan to customer billing and payment collection. Wilkinson Financial can help you thoroughly analyze your company's level of liquidity risk and can develop sound, federally compliant liquidity plans in case your business faces financial crisis.

Manage the liquidity of your investments with the help of financial experts

Obtain liquidity information on investments and paper debts from experts in the investment field. A solid liquidity strategy creates cash flow to take advantage of investment opportunities when they arise. All investment professionals complete liquidity training to ensure a full comprehension of associated strategies and risks.

I recommend: Finance firms such as Liquidity Solutions purchases paper debts and liabilities that are illiquid and provide cash for a portion of the value. The Bank of New York Mellon provides tools for managing the liquidity of your investments, with options that improve your control over this important aspect of your portfolio.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Review all liquidity consultant advice with a fine tooth comb. These professionals provide a valuable service, but make their profit on the difference between assets' selling price and their listed value. Ensure the valuations are correct for the greatest yield and plan future purchases with care to avoid holding assets unnecessarily.