Cash flow is one of the biggest challenges any business has to face and is especially time consuming for owner-managed businesses. Good cash flow management is critical to ensure the success of your business.
The Horsfield & Smith team thought it would be useful to provide some tips on how you can manage your business cash flow more efficiently:-
Tip 1 – Switch to Online Accounting Software
Your cash flow is only as good as your accounting and reporting. You can keep on track of your cash flow more easily by switching to the cloud. Our Cloud Accountancy Solutions can help you save heaps of time. You will also be able to view your cash flow situation in real time.
Tip 2 – Increase payment options
Think about increasing your payment options for customers by accepting credit and debit cards. You may also want to consider mobile payment providers such as PayPal, GoCardless or Stripe. By giving your customers more payment options, should encourage them to pay your bills more quickly. If you follow Tip 1 and use a cloud based accounts program, you can add a “pay now” button to your invoice.
Tip 3 – Talk to customers
If you normally send email reminders to your customers, these can be easily ignored or deleted without being read. Also customers may be put off by the automated email approach. Why not think about picking up the phone and speaking to them instead? This way your customers will get to know you better and will be more likely to pay your invoices on time.
Tip 4 – What about invoice financing?
If your business is growing rapidly and you are grappling to meet overhead costs, you could finance your unpaid invoices as a short term solution.
Invoice finance works by paying you a percentage of the accounts receivable so you don’t need to wait to get paid by the customer – the invoice finance company will chase the money on your behalf from the customer.
This can help to improve your cash flow and free up working capital to run your business. However, we recommend that you speak to an accountant to obtain professional advice to establish the best option for your business.
Tip 5 – Review payment terms
You can improve cash flow by reviewing the payment terms for your suppliers and comparing them to the payment terms for your customers.
If you are required to pay your suppliers within 30 days but you allow your customers to pay you within 60 days, you are immediately forming a gap in cash flow. This is a vital area to focus on if you want to improve cash flow.
For more helpful tips, talk to us and obtain advice on how to run your business more efficiently.
We can help you – contact the team on 0161 761 5231 or email: theteam@horsfield-smith.co.uk.
