Having trouble with cash flow and need some ideas on how to tackle the problem? Never fear, this month we’ve got some simple tips for you to sort out your cash flow issues and get your business back on track.

Invoicing

Getting your customers to pay on time can be an issue for many small business but there are some easy things you can do today to help solve this:

Make clear payment terms - the best place to start is by making clear payment terms to your customers - want payment to be made within 7 days? Let them know! Now is not the time for being vague with your customers.
Consider deposits or part-payments - if you provide a service, you might want to think about asking for a deposit or part-payment when some of the work has been completed. This way you’re not chasing up a large amount at the end.
Invoice immediately - don’t wait a week, a fortnight or even a few days - invoice your customer straight away. They’re much more likely to pay it if the work is fresh in their minds.
Provide easy payment options - make sure your customers can pay their invoice quickly and easily - a payment button on their emailed invoice is ideal for this.
Don’t be afraid to chase payments - the longer an invoice remains unpaid, the less likely it will ever be paid so don’t be afraid to chase up money you are owed. Don’t leave it too late - even a simple reminder email as soon as the invoice is overdue can help.

2. Business v Personal

If you want an accurate view of your business performance and financial position, it is vital that you keep your business and personal finances separate. Small business owners especially can find it tempting to blend the two but you will be able to manage your cash flow much more effectively if you keep everything separate.

3. Stock

Do you hold a lot of stock? Consider having a sale on any stock that is just taking up space and costing you money - you could end up with some extra cash from the sale and you’ll save money on storage as well. It’s win-win!

4. Pricing

It’s a good idea to regularly review your prices to make sure that you’re not undercharging. Keep an eye on it and update your prices as needed. Undercharging your customers costs you money and can even give your customers the impression that you are ‘cheap’ or ‘budget’ which can affect your sales.

5. Overheads

Make sure you look at your electricity, rent and telephone providers regularly and compare the costs of switching to other companies. Even just asking your current provider for a better deal can lower your overhead costs and increase your cash flow.

6. Bookkeeping

Keeping your accounting info up-to-date is absolutely essential for your small business cash flow. A good accounting software package (Xero, QBO, MYOB) will give you an accurate snapshot of your current financial state, which will help you make better financial decisions. You can use a myriad of reports to keep a close eye on your business performance as well as who owes you what and when.

If paperwork isn’t your thing, we can help! We are the experts at helping small businesses improve their cash flow. Connect with us today to find out how we can help your small business.