Making sure your money flows freely within your business is one of the most important things you can do to ensure longevity. If your cash flow is stalled for any reason at all, you might find that your business begins to flounder; you will struggle. You could be hindering your cash flow without even knowing it!
Here’s what you could be doing to hinder your cash flow:
No Incentives To Pay Early
If you really want to get your invoices paid on time, then you need to give your customers a good incentive to pay early. How about a small amount knocked off the bill, or something you know will make them reach for their payment card ASAP? If you’re not giving incentives to pay early, or even a reason to pay on time (late fees, for instance) then you can’t act surprised when they don’t pay you until you’ve had to get a third party involved.
Failure To Nurture Your Internal Finance Stars
Your internal finance needs to be managed by the right people if it’s going to make a difference - it doesn’t matter how well designed your policies, processes, and reports are. Invest in your staff by giving them the financial knowledge that they need, and ensure they are equipped with the relevant skills. Training your workforce means a more empowered workforce that boosts profits for your business. Don’t forget to recognize their contributions and successes, either!
A Poor Customer Reminder System
Your customers may genuinely have forgot that they received an email from you asking them to pay. So how are you going to remind them? If you have a poor customer reminder system, again, you have nobody to blame but yourself!
Not Giving Multiple Ways To Pay
Are you giving multiple ways to pay? You should be allowing customers to pay via paypal, cards, and anything else that will make their lives easier. What about if you need cash now? A merchant cash advance business gives a lump sum cash payment in exchange for a daily percentage of credit card receipts. You should only do this if your cash flow has seriously stalled and you need money now. The people starting a merchant cash advance business will set the payment terms, so make sure you read them carefully before you agree.
Failure To Implement Effective Financial Controls
Effective financial controls are a must, so invest in your business’ sustainability and implement financial policies and processes. Ensure you update them as your company grows too!
Trying To Do Everything Alone
You know what you’re good at, and chances are, it’s not keeping track of every penny in your business. How about hiring those with experience in financial management, or a good advisor/accountant to help you? They may be able to find blind spots within your business and help you to find ways to fill in the gaps.
So, are you hindering your cash flow by doing these things? Find solutions ASAP and you should find money moves through your business far more freely than before!