In the business world, cash flow remains the lifeblood that keeps your operations running smoothly. Whether you’re a start-up finding your feet or an established business, maintaining a steady cash flow can be a challenge. But a few small changes can make a world of difference to your cash flow and overall revenue.
So, let’s look at some practical strategies you can implement to boost your cash flow.
Get paid faster
Receiving speedy payments is crucial to improving your cash flow. If you typically invoice your customers, consider offering them an incentive to pay earlier than the standard 30-day payment period. A small discount of 5% could encourage them to settle their bills within 10 days.
Make invoicing a priority
Invoicing should be a regular part of your business day. Adopting a same-day or next-day invoicing practice can ensure you’re on top of your receivables. Additionally, consider emailing invoices as a supplement to regular mail.
If you have customers who are habitually late, don’t hesitate to remind them regularly for payments.
Set up a merchant payment account
Letting your customers pay through credit or debit cards can speed up payments significantly. Merchant accounts allow for next-day value for sales and services. Consider setting up an online payment portal on your website or sign up for a trusted third-party platform such as PayPal.
Use business credit cards
Using business credit cards to pay suppliers or make purchases can also help in managing cash flow. Most credit cards offer a grace period, sometimes up to 25 days, allowing you to settle the statement balance without incurring interest. Some even come with cash-back features.
Make your cash work for you
If you find yourself with extra cash, don’t let it sit idle. Consider investing in a short-term, high-interest savings account for your business or reducing your line of credit. These options can help you earn a competitive interest rate while ensuring your funds remain accessible.
Invest in today’s technology
Investing in modern bookkeeping software or invoice management services can help streamline your receivables and expedite customer payments. While it may seem like an additional cost, this investment can offer tremendous cash flow benefits in the long run.
Remember, cash flow is king in the business world. Implement these simple yet effective strategies to maintain a positive cash flow and drive your business towards success.
Need help with managing your cash flow? Get in touch with us now.