Last week we discussed the first part of this equation, how to make money, or more specifically, how to bring in the money faster. Now let’s take a look at the other side of the equation – expenses, or more specifically, how to pull out money more slowly.

The accounting adage is that you want to keep your money in the bank as long as possible to earn as much interest as possible before paying your bills. But today’s reality is that interest rates are microscopic. A quick scan of www.bankrates.com shows top APYs of around 1% before bank fees or requiring minimum balances. Some APYs were as low as 0.05%, which offer little to no incentive to keep your money on the bank. While the nation’s unemployment rate has come down in recent months, it’s still high at 7.9% as of October. So you have obligations, you have to pay them, but here are five tips on how to better manage those payments.

1. Always negotiate with your vendors. Negotiate on price and on terms. Some vendors have a due on receipt or 10 – 15 day payment term. See if you can negotiate a 30-day term, it’s a common term for many vendors and is another way to manage cash flow if you can’t get them to come down on price.

2. Pay by the due date, not a day before. Although it may be easier to batch payments and cut all your checks at the end of the month, check the terms of each of your vendors. Pay each as close to the due date as possible. It takes a little more accounting, but it keeps more cash working for you longer.

3. Use electronic debit when possible. Why? Because it’s faster than mail and offers an exact delivery date. Typically when mailing a check, you mail a little earlier to ensure it’s received before the due date. An electronic funds transfer lets you budget down to the exact due date, can be auto-scheduled, so you don’t forget, and offers a nice, clean audit trail.

4. Pay your bills with credit cards. It will give you 30 additional days to pay the amount in cash, plus you can take advantage of credit card rewards such as cash back or travel points. Credit is a great payment option, provided the card is paid promptly, and the balance doesn’t simply accumulate as an additional debt.

5. Avoid late fees and interest. Pay your vendors on time.

There are other options to alleviate a short term cash flow crunch, like a line of credit or a merchant cash advance (we can help), depending on your needs. Lastly, invest in decent cash management software, or at the minimum, an effective spreadsheet template to help you effectively manage revenue collection and expense payments. Here’s a terrific spreadsheet template, offered via courtesy of Inc.com, to get you started. Twelve Month Cash Flow Spreadsheet Template.