Maintaining a consistent cash flow in the corporate realm is crucial for keeping your business operations running smoothly. Whether you are a new business navigating the initial stages or an established enterprise, sustaining a stable cash flow can be challenging. However, implementing a few minor adjustments can significantly impact your cash flow and overall earnings.
Let’s explore some effective tactics you can utilize to increase your cash flow.
Get paid faster
Improving your cash flow depends on receiving payments quickly. If you usually send invoices to your customers, consider motivating them to pay sooner than the usual 30-day payment period. Offering a small discount of 5% could prompt them to clear their bills within ten days.
Make invoicing a priority
It is important to regularly include invoicing in your business day. Making invoicing a same-day or next-day practice can help you stay on top of your receivables. Also, consider sending invoices via email in addition to regular mail.
Regularly remind customers who are consistently late to make their payments.
Set up a merchant payment account
Enabling your customers to pay using credit or debit cards can expedite the payment process. A merchant account allows you to receive the value of sales and services the following day. Establishing an online payment gateway on your website or registering with a reliable third-party service like PayPal might be beneficial.
Use business credit cards
Utilizing corporate credit cards to settle payments to suppliers or conduct transactions can aid in cash flow management. Many credit cards provide a grace period, occasionally extending to 25 days, enabling you to clear the statement balance without accruing interest. Additionally, some cards include cash-back benefits.
Make your cash work for you
Consider using any extra cash instead of letting it sit idle. Consider investing in a high-interest, short-term savings account for your business or paying down your line of credit. These choices allow you to earn a competitive interest rate while keeping your funds easily accessible.
Invest in today’s technology
Investing in up-to-date bookkeeping software or services for managing invoices can optimize your receivables process and speed up customer payments. Despite seeming like an extra expense, this investment can provide significant cash flow advantages in the future.
Remember, cash flow is king in the business world.
Implementing these straightforward but impactful tactics can help you sustain a healthy cash flow and steer your business towards prosperity.
Need help with managing your cash flow? Get in touch with us now.