If you own a company, you will know that cash is king, and no matter how good your profit projections for the coming months might look, if you don’t have enough of the green stuff rolling in right now, your business could fold before you ever see those profits. That’s why it's vital that every business has a good strategy to keep its cash flowing. Here are some simple things that can help with that:
If you send out invoices as soon as a job is complete, then chances are it will be paid more quickly than it might otherwise be, especially if you change your company’s payment policy so that invoices must be paid within 30 days, rather than 45 or 60. Doing just this and nothing else could be enough to give your cash flow a boost and keep your business going.
Make Financial Checks
As a business, giving credit can be a good way of encouraging customers and increasing your sales, but you should be careful about doing this, ensuring that you carry out as many financial checks as possible before extending a line of credit, if you want to keep the cash flowing.
Get a Business Credit Card
Business credit cards are often a good option for making purchases and paying bills, especially in the early days when you’re starting out. To make them really work for you, you should find a card that has a considerable grace period, offers cash back or other incentives, like air miles (useful for business trips) and which has a low-interest rate.
Consider Non Recourse Factoring
Non recourse factoring is basically something that enables you to borrow the money you’re owed in payments by clients and customers in advance of them paying up. When you’re in a tight spot, and you don’t have enough cash to cover your current expenses, it can be a good way of keeping things going.
Accept Card Payments
If your business accepts card payments (credit and debit), and you encourage your clients to pay via cards, perhaps by offering a small discount, or making it easier to do so, you will get a next-day value for your sales and you won’t have to worry about handling checks or banking cash, which takes up valuable time and money too.
Use Your Data
If you aren’t already closely tracking your cash flow, you need to start now. By tracking the data, you can identify when your business typically has low periods or when it does more business than usual. Allowing you to better plan your finances to ensure that you’re never left short.
If you have the kind of business that allows for it, offering continuity sales, such as subscriptions to products and services, or offers to customers who buy products over a set period of months, can help to ensure that you always have a steady flow of cash coming in.
Keeping your company’s cash flowing can certainly be a challenge, but if you look at the data, keep your options open and encourage sales, your cup shouldn’t run dry!