It’s true that cash flow is the salient dynamic that leads to the failure or success of a business.
Whether your new company’s performance is stagnant or you’re growing quickly, cash flow is paramount.
There are at least 11 ways you can increase cash flow for your business to function properly.
Here are the tips:
1. Save time and energy
Use good accounting software such as Bookkeeping, Quickbooks, Sage Peachtree, or Simply Accounting. Make sure you check out all the options to make certain your business needs are met.
For example, Simply Accounting doesn’t perform time billing.
Also, if you want an inexpensive software option for just one computer without remote access, Bookkeeper might suffice for you.
2. Software benefits
Such software-generated invoices will tell customers where to send a check, the amount to pay, and the due date. Make certain you bill the right person and department.
3. Invoice promptly
Generate and distribute your invoices promptly. Depending on your type of business, e-mail your invoices, forward invoices as soon as you finish a project, present invoices in person, or include your invoices with the product.
4. Be consistent
Make certain your customers know you have a businesslike approach and will charge late fees for past-due amounts
5. Weekly statements
Until you can relax about cash flow, produce weekly financial statements. For more information, see my primer for best practices in preparing financial statements.
6. Consider discounts
To accelerate cash flow, consider allowing discounts if customers pay before the due date.
7. Due diligence
If a customer doesn’t pay in a timely manner as prescribed by the due date, be in touch right away. Otherwise, it will hurt your cash flow.
8. When to negotiate
If the customer can’t pay on time, negotiate the best arrangement that you can. In the future, if you decide to have a business relationship, decide on a strategy.
If you believe it was an honest misunderstanding and the customer is fully capable of paying on time, no further action is probably needed. Otherwise, for any future dealings, take the precaution of getting at least partial payment in advance.
9. Timely receivables
If you have more serious concerns about timely payments, here’s what to do if accounts receivables are a problem.
10. Cost cutting
Review your costs and look for items to cut back.
ASAP, deposit your funds in your bank account. If cash flow is tight, delay making payments as long as it won’t hurt your business relationships. Take advantage of early payment discounts. Consider online bill paying on the due dates or using business credit cards to keep the cash on hand.
From the Coach’s Corner, here are related topics:
Budget Planning Tips for a Micro Business — For entrepreneurs, often the most difficult part of launching a business is preparing financial projections. It may not be the most enjoyable task, but budgeting is imperative for maximizing performance.
12 of the Best Financial-Planning Tips for Entrepreneurs — Typically, there are critical mistakes made by entrepreneurs. In essence, they’re so busy putting out fires, they leave their financial security in doubt.
Grow Your Business by Appearing Rich but Conserving Cash — You’ll find it easier to grow your firm if you appear to be wealthy. This will enable you to build relationships with successful entrepreneurs who will introduce you to key people and facilitate growth opportunities for you.
19 Best Practices in Due Diligence for Profitability — To lead your company to high profitability – and to stay there – due diligence is needed in critical values.
Use Psychology to Ease Your Debt-Collection Headaches — Stellar debt collection is all about emotions. Certainly, you don’t want to be too aggressive in debt collection and lose possible revenue from slow-paying customers – they might soon be able to pay you.
12 Tips for Profits to Keep Your Business Dreams Alive — Most businesspeople agree the economy continues to be grow. But if your business has challenges, here’s what you can do.
“Success is a poor teacher.”
-Robert T. Kiyosaki