4 Tips for Improving Cash Flow
If you’re the owner of a small business, you know just how important good cash flow is to sustaining your company operations. With all the other logistics involved in running a business, it can be easy to overlook the management of your financial resources. However, it’s important to make sure you have enough cash on hand to cover your expenses, pay your bills and fulfill customer orders to keep your business profitable. Thankfully, struggling financially doesn’t have to become a way of life. With a few simple strategies in mind, you can start managing your business finances better today. Take a look.
Create Detailed Financial Plans
The best way to avoid losing track of your finances amongst the other operational aspects you handle is to lay out a detailed plan and regularly check in on your progress. Try setting well-defined financial goals and reviewing them at regular intervals throughout the fiscal year.
Forecast Your Yearly Funds
In order to lay out longer-term plans, you’ll want to create annual forecasts for your expected funds that year. This can help you predict potential downturns throughout the year, and is useful for budgeting and investing purposes as well.
Improve Your Customer Service
Sometimes clients fail to make on-time payments because your payment terms weren’t clearly stated. The easiest way to prevent this from happening is to set out clear payment terms and be sure you’re communicating them well. Good customer service could improve your bottom line! For instance, you’ll want to outline things like the period of time clients have to pay an invoice, how much contact you’ll have with them, what your protocol for resolving disputes is, what your collection process is and so on.
Request Payments Right Away
If your clients pay on time in accordance with the terms you’ve set forth but you tend to delay sending your invoices, you could be hindering your available finances. To avoid this, you’ll want to send clients your invoices as soon as possible after your project is completed or your service is rendered. Clients might not pay immediately after they receive the invoice, so if you delay sending the invoice by a few weeks and the client doesn’t send the payment for a few weeks after that, your money won’t be in your bank account for potentially a few months.
Having a handle on cash flow is essential to your business’s long-term success and profitability. Try implementing these straightforward strategies today, and you can feel confident your business’s finances will be improving in no time.
