Good control of your cash flow is essential for the successful growth of your business. It’s important, as a business owner, that you understand how much cash is going in and out of your business. However, it is also important that you make improvements where you can that will help improve your cash flow.
We have put together five improvements for your business cash flow below. Have a look at our ideas and give them a go. See how much they can help you improve your cash flow, if even in the short term.
Everyone makes mistakes, however even the smallest mistake on an invoice can be used as an excuse by a client to delay payment of the invoice. Make sure that your invoices are sent on time and double check that they are correct, so your clients have to pay on time.
It’s possible to cut down the amount of time you spend waiting for payment, by offering an incentive. A discount as small as 1% or 2% for clients that pay within 2 days of receiving the invoice increases the chances of speedier payments and money in your business account sooner.
Look at the assets in your business. Are they all being used? Do you have a large printer with all the bells and whistles that is just not being used? Then why keep it where it takes up space and gathers dust? There could be another business down the road that are willing to pay good money to take it off your hands.
Many business owners are scared to chase for money they are owed for outstanding invoices, for fear of causing client upset. Make sure you put time aside to chase your debts regularly. But make sure you keep it friendly and polite too. That way you’ll get paid and keep the client.
Ask clients when they expect to pay your invoice. Then use this information to manage your own credit control function. For example, if a client pays all invoices on 30 day terms, there is no point chasing for payment after 7 days. It also means you can work your invoices around the time they do their payment runs.
If you are concerned about the cash flow of your business, then please call our team of accountants in Peterborough, where we can discuss your requirements and suggest suitable recommendations for your business.