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Cash Flow Management for Pallet Companies

Cash Flow - Hands holding cash
Kevin SageKevin Sage
December 4, 2023

The pallet industry is highly labor-intensive and demands that pallet companies purchase supplies way ahead of receiving payment from their customers for purchasing their pallets.

This requires pallet companies to pay close attention to cash-flow management in order to ensure they’re able to stay in business between the times they pay those expenses and receive those revenues. Without the hefty capital reserves of a large corporation, the need to optimize cash flow management for pallet companies is even greater.

Like any business, the key to proper cash-flow management for a pallet business is to reduce expenses and increase revenues. It also involves effectively timing inflows and outflows and making the most efficient use of pallet inventories.

Hidden Costs for Pallet Companies

Cash Flow

Pallet companies face many hidden costs that can eat away at their cash flow. Just some of these include:

  1. Management, tracking, and recovery costs
  2. Write-off charges
  3. Costs of misplaced and lost pallets

One of the best ways techniques for cash flow management for pallet companies is precision pallet management which helps control and reduce these hidden costs.

Cash-flow Management Solutions

There are several simple cash-flow management solutions pallet companies can use to increase revenues and lower expenses.


Many pallet companies are employing software like Enterprise Resource Planning (ERP) tools that allow them to manage and report pallet inventories and operations with greater speed and precision.

You can manage cash flow using simple spreadsheets or by implementing full digital data and cash-flow management solutions into your accounting systems. Technology can help you improve your company’s financial efficiency in many ways, including by helping you create an optimal marketing budget for manufacturing.

It can also help your pallet business to implement software solutions that make billing faster and collection efforts more thorough. Both of these help keep cash flowing in.

Improving Accounting Systems

Efficient invoicing and collections systems are essential to adequate cash flow management for pallet companies. Here are some ways to improve invoicing and collections:

  1. Write contracts correctly and invoice clients according to that contract.
  2. Provide good terms exclusive to those clients who have good commercial credit.
  3. Provide the clients with all the paperwork they will require to pay you without delay.
  4. Promptly follow up with clients who need to be on time to make payments.
  5. Take care of disputes quickly and professionally.

You can also improve collections by offering discounts for early payment. These provide slow-paying clients with greater incentives to pay sooner.

Man looking at invoices on the computer

Yet another useful way to keep cash flow under control is to factor in receivables. Factoring receivables involves using a third-party company that finances your receivables in two separate installment payments. The first is an advance that covers the bulk of the invoice; the factoring company deposits these funds into your bank account the moment you submit an invoice. You receive the small remainder of your payment to settle the invoice once the customer has paid. If your client is creditworthy, this can be a great way to get most of your invoice paid right away while you wait for the customer to make up the rest.

Speedy billing and thorough collection efforts can help you ensure that the pipeline of inflowing cash continues.

Culling Costly Partners

By rooting out the trading partners who don’t follow proper procedures, you can reduce costly pallet losses.

Selling off Excess Pallet Inventory

By auditing your pallet inventory regularly, you can find ways to turn unnecessary costs from ignored pallets into extra income.

If you have pallets you don’t use, rather than letting them sit in the yard or warehouse accumulating dust, you can sell them off for extra revenue.

Likewise, you can boost revenues by repurposing and recycling pallets back into the marketplace. For example, you can grind up poorer-quality pallets into mulch.

Repurposing old and damaged pallets helps boost revenue and eliminate waste. It also helps keep yards cleaner and removes lesser-quality pallets from inventory. All of this it does without the need for a labor-heavy teardown.

Taking Tax Advantages


Make sure to take advantage of all the tax benefits available to pallet companies. This includes taking the maximum tax deductions you’re allowed for your equipment purchases.

Increasing Financing

You can increase business financing by making investments in vehicles like money market funds, T-bills, certificates of deposit and high-yield savings accounts.

Investing some of your capital reserves can help you combat inflation and even potentially earn a bit on those latent funds.

Maximizing Downtime

When orders are low, you and your team can still help manage cash flow by making the most of that downtime. Ways to do this include utilizing your workers to clean up your warehouses and yards and finding bottlenecks to eliminate.

Benefits of Cash-flow Management for Pallet Companies

When you effectively manage your pallet inventory and efficiently move it throughout the supply chain, you can make sure that your pallets remain reliably durable and sturdy. This reduces the amount of turnover in your inventory from damaged pallets.

By implementing proper cash-flow management techniques, your pallet company can not only save money, but it can turn into income for your business as well.

For help maximizing cash flow from your pallet company marketing efforts, give us a call today.

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