Cash flow is the single most important thing to a small business in order to keep everything running smoothly. However, keeping all your invoicing procedures ship shape isn’t always easy. So, what are our top tips for managing your business cash flow?
1) Keep track of your cash flow forecasts on a regular basis. This will help you to keep on track with your finances while avoiding any short falls that you may come across. Regularly check your cash flow forecast to keep on track with finances and to avoid shortfalls. If you use invoice finance then you’ll be able to tell when you might need to factor invoices by knowing what’s what with your cash flow forecasts.
2) Send out your invoices as quickly as possible and be sure to follow up with an email and phone call. This will make sure you’re invoicing efficiently and keeping track of all your payments.
3) Get to know your customer payment dates and try not to ignore any irregularities and delays. A customer who’s struggling to pay might be about to go under and this is something you need to be aware of.
4) Try not to lay out a lot of cash for unnecessarily large quantities of stock. This means you’ll have more cash to hand as you won’t benefit from having huge quantities of stock.
5) It goes without saying that you need to start cutting back on fruitless spending as well as limiting your overheads.
6) Try to stay on good terms with your bank or other lenders in case you need to ask for help with credit levels or if you need new financing.
7) Offer customer incentives for early purchases or quick payment, helping to limit late payment problems.
Get to know your alternative funding options such as invoice finance and asset based financing. Getting to know how factoring and invoice discounting works could help you to make the best financial choices for your business.