Are you struggling to have a better cash flow? Worry no more because we will help you improve it. By following these five simple tips, you can be sure that you will have a better cash flow than you currently have right now.
Tip # 1: Commit to practical trading terms
In a small business, a 30-day term may be too long for you. It is important to take note of these receivable as it will determine your relationship with your customers. You should be able to remind them of their outstanding payment in a nice way so that they would know that you are tracking your transaction to them. For a small business, it is recommended to make your terms of up to seven days. This will ensure that you have a steady inflow of cash and it will make your expenses easier to manage.
Tip # 2: Control your debts
There are a lot of business that fails because of poor cash flow. They were not able to properly manage their cash flow that is why they were not able to survive in the market. And one of the areas that let the down the most are customers who fail to pay their invoices on time. It is important to remind them of their payments to establish a relationship and for them to treat you seriously. You should be able to get on the front foot and follow up on late payments.
Tip # 3: Improve your invoicing process
This is just a simple equation to remember. The slower you are at getting your invoicing out to your customers, the slower they will be in paying you. Thus, you need to be very prompt in sending out these invoices so that you customers can pay you immediately. If you are busy enough to make this as a priority, you can hire a professional bookkeeper to do this task for you. They can effectively manage those you haven’t paid and they can make the necessary follow up whenever the customer has already lapsed their due date. Visit Eclat Accountancy Ltd to know more about their bookkeeping services that will surely be your guide with this. Click here to visit their website.
Tip # 4: Additional services
Be imaginative of the things your customers might want from you. You can offer your existing clients something that they will like, and at the same time can increase your income. Learn how to be creative when it comes to your business. Continue to think of possible ways on how to attract customers so that your cash flow will be happy too.
Tip # 5: Minimise stock levels
Your stock can be one of the major expense for your business. It is considered as an expense that is incurred before a sale takes place. It does not only require space but it requires insurance. With this, it is important to be strategic when it comes to stocking your products. Make sure you don’t have too much spoilage, if possible make sure there is no spoilage. You should be able to classify products that are taking too long to move so that you can formulate strategic decisions on how to handle these things. Errors in this area can cause your cash flow to disrupt and other areas will be affected by it.
These are just little ways on how to improve your cash flow. You should always make sure you know your numbers. Always be familiar with how they work and you will know how to face it.