Speed Up Receipt of Cash
- Offer a small discount to customers who pay their bills early.
- Charge a penalty to those who pay late.
- Monitor your receivables on a weekly or bi-weekly basis and follow-up with late payers when appropriate.
- Expedite the process for sending out invoices immediately after the delivery of goods or services.
- Revise your payment terms. If your current terms are 60 days, then change them to 45 days or 30 days.
- Offer credit. Be careful when extending credit and always do a financial check on new customers before offering them credit. Also, check their business references.
- Automatic discounts and penalties for early and late payments
- Automatic messages for late payments, or reminders when a payment due date is close
- Ability to mark orders as delivered in your tool, and have invoices immediately sent
- Automated credit checks, increases, and applications for potential customers
Use Your Business Credit Card
- Consider using your business credit card to pay suppliers and make purchases.
- Learn about your card’s grace period, and take advantage of it – you may have up to 21 days after receiving your statement to make the payment.
- Get a card with cash-back features or rewards.
- Speak to your business banker about the card that’s right for you.
Known Where You Are Spending and Why
- Evaluate spend and expense management platforms to take advantage of automated solutions that can support better spend management to increase cash flow.
- Choose a platform that allows you to receive notifications when you are nearing budget caps, or when others add expenses.
- Add the platform’s app to your smartphone, and check budgets in real-time before making new purchases.
- Make sure other members of your team are using the app to control their spending.
- Regularly assess your budgets and watch for areas to cut back cash spending.
Encourage Use of Payment Cards
Work With Your Accountant
- If you don’t trust your accountant as a business advisor, get a different one.
- Ask for suggestions on improving cash flow.
- Bring all of your business information and data to the accountant to present a full view of what you are working with.
- Consult with them multiple times a year to stay on track and get suggestions for improvements.
Offer Discounts for Quick or Early Payment
Improve Your Marketing
Analyze Your Cash Flow
Deposit Cash Balances into Interest-Earning Accounts
Schedule Payments on Long Contracts to Your Benefit
Get a Line of Credit
Use Longer Term Financing
Put Your Cash to Work
Consider Subscription Sales
Re-evaluate and Fine-Tune Product Pricing
Low Pricing Could Devalue Your ProductIf your pricing is too affordable, you may not be taken seriously, and customers may wonder about your quality. But if your pricing is too expensive, you will lose some business to competitors. So, you have to recognize that the bewst margin sits in the happy middle. Find a price point that helps boost your cash flow while not resulting in lost sales. To increase prices, start by assessing the market costs of your products. Next, choose a small number of goods or services to test, and begin raising prices. Take the information from new sales and compare it to sales before the change, on just the products whose prices have increased. If sales increase, add more products to the test. If you see a decrease, watch the comparison for a longer amount of time, and make changes based on the results.
Invest in Your Business