If you are a business owner, then you will have a big focus on sales and increasing your top line. And if you are managing to do so, and things are growing at a rampant rate, then you are certainly heading in the direction that you want to be in. But it is important to make sure that you do not get complacent. Because even if things are going well, there can be things that happen that can hinder the business, especially if there are problems around finances, cash flow, and things not running as efficiently as they should.
For example, you may have quite a lot of outstanding invoices that are due to be paid to you. But if you have payments of your own to make, and those are due before what is owed to you is due, then you can run into cash flow problems quite simply. And when there are cash flow problems is can impact being able to make payments on time, paying interest, creditworthiness, and even trustworthiness and reliability from contractors or people that you do business with. So staying on top of it all is really important. If you want to improve cash flow, then here are some strategies to be planning for and thinking about, to help.
It is unlikely that you will know if many people that don’t like to have an incentive to do something. And money is a massive incentive for people. So how about offering customers or clients a discount if they pay their invoices or bills ahead of time? Then you get money when you need it, and the client or customer will have saved some money. It is a win-win situation for all of you.
Send Invoices Immediately
There is a pretty standard waiting time when it comes to invoicing, and if you haven’t arranged for them to pay straight away (and you’re not offering a discount for early payment), then you need to get your invoices out right away. There tends to be a standard 28 days for people to pay, so it does make a difference when people pay on time. So getting the invoices out promptly can make a difference. You could also look at something like a satellite billing integration guide if that is relevant to your business, to see how you could improve cash flow for your business because of a reduced billing cycle length. If you get bills out sooner, then the chances of them being paid sooner is higher, helping the billing cycle length and the business cash flow.
If your business is one where you buy and sell items, then you are likely to have a pretty large inventory to make sure that you can get items sent out on time. But if you have a lot of inventory, then you have a lot of cash tied up in a warehouse somewhere, that could be out and being used to help cash flow. Instead of buying lots of what hasn’t been selling, get rid of it by selling it, even if you offer discounts. Stick to what sells, and then you’ll free up cash.