When cashflow is a problem, your business is in peril. It means you are constantly struggling to pay your staff and suppliers because you are waiting for your customers to pay you.
Businesses die and owners become distressed when there are cashflow problems. But with a little work and planning, you can take control of your cashflow and build a thriving, prosperous business.
Here are seven tips to help you take control of your cashflow.
- Issue invoices quickly. The faster your clients receive an invoice, the sooner they will need to pay.
- Make it easy and convenient for your customers to pay you by providing several payment options. For example, accepting credit card payments may incur additional charges for your business but could provide immediate payment of your bill.
- Consider giving your customers a discount for paying early or on time. Everyone loves to save money – even if it is only a couple of dollars.
- Some projects take time to complete so ask for progress payments for longer projects.
- Schedule your own bill payments so you are paying the most important ones first.
- Invest any surplus funds in high-interest, short-term investment accounts. It’s a great way to make your money work as hard as you do.
- If you have sales staff, link their commissions or bonuses to invoices paid rather than revenue billed. They have the relationship with the customer so will be better placed and motivated to follow up late payers.
By spending a little time examining your billing cycle and investigating ways you can improve it, you will be able to improve your business cashflow and reduce the stress of owning a business.
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