Cash flow is important for any small business - it can be the difference between your success and failure. There are a few things you can look at to improve your cash flow, and through online cloud accounting with Connective Accounting you can make some small changes today to see results fast.
1. Invoicing
Waiting on payments from clients, or worse - clients who don’t end up paying you at all, can have a negative effect on your business’s cash flow. To help reduce this, consider:
asking for a deposit before starting a job,
requesting partial payments for each stage of the work you complete,
invoicing straight away instead of waiting until the end of the month,
sending statements at the end of each period, listing outstanding invoices,
following up on unpaid invoices as soon as they become due, and
consider offering discounts for early payments so customers will have an incentive to pay you faster.
Cloud accounting lets you create and send quotes and invoices instantly, straight from your phone or tablet. You can also set up recurring invoices and copy previous invoices to make it even easier to invoice your customers quickly.
2. Customer Payments
Make it as easy and convenient as possible for your customers to pay you for your hard work by offering them plenty of ways to settle their invoice. By offering online payments, mobile payments and over the phone payments, your customers can settle their invoices quickly and easily.
Cloud accounting allows you to offer secure online payments straight from the invoice - just one click and your customers can start entering their payment details. You can also set up automated email reminders to politely let your customers know when payments are due.
3. Expenses & Overheads
Take full advantage of your suppliers’ payment terms, they are like an interest free loan.
Speak to your suppliers and negotiate more favourable terms if you need to.
Pay your supplier invoices when they are due, not before.
Review your Aged Payables Report regularly to see when future payments are due.
Keep an eye on your overheads. You should compare electricity and phone companies regularly, to make sure you are getting the best possible price for these services and don’t be afraid to call your provider to ask what they can offer you.
Review your expenses easily with cloud accounting. You can see everything you need in graphs and reports so that you can look at the expenses that could potentially be reduced.
4. Income
You can improve your cash flow by generating more income for your business. You could boost your income through a successful advertising campaign, increasing your pricing or improving your customer service.
Utilising the various features cloud accounting offers will reduce the time you spend on your paperwork and give you more time to:
look after your customers to provide superior service,
work on an advertising campaign to increase exposure, or
look at pricing changes.
5. Organisation
One of the most important things you can do to improve your cash flow is to make sure your business is organised:
Link your bank account and automatically download transactions straight to your cloud accounting software
Process transactions regularly to make sure your accounts are up to date
Be aware of outstanding invoices to allow you to keep track of payments more effectively.
Budget to ensure that your business is being run as efficiently as possible, and set financial goals so you can track your performance towards your goals.
Cloud accounting can take the headache out of keeping your business organised by giving you real-time information on all your key financial metrics.
These tips can help you improve your business’ cash flow and help your business succeed.