Money makes the world go round. That is especially true in any business, more emphasis on small businesses that is. Cash flow in a small business is crucial to keep it afloat. Cash management should be your number one priority if you want to be successful. If you are experiencing some difficulty in getting a continuous cash flow, read on.
Get your clients to pay on time
Do not delay sending bills to your clients. If you’re doing this through snail mail, send the bills out earlier. If you’re having a hard time preparing your bills, invest in a franking machine. You can either rent it or buy a brand new machine. There are franking machines made for small businesses so you don’t have to shell out thousands of dollars. You can finish preparing your bills in seconds with the use of a franking machine. You also get discounts from the post office for sending properly franked mail.
Send out email reminders at a set date every month. Assign someone to keep track of your client’s balances and account status. Do not tolerate negligent clients. A bad paying client will eventually kill your business. It might be better to just let them go if they refuse to adhere to your paying standards. Find clients that are responsible with paying their bills.
Always send an invoice the same time you send out products to your customers. If you have an arrangement with your client such as ‘buy now, pay later’, sending an invoice with their order gives them an idea of how much they owe you and when they should pay.
Hold on to your money for as long as you can
Be wary of paying bills earlier than the due date. Sometimes, if you overlap credit card payments, instead of your bank thanking you for the advanced payment, they will charge you for ‘late’ payment for your next bill. This is because they will credit your second payment to the current month’s bill. So, it would look like you didn’t pay for your next bill when in fact you paid in advance. To avoid confusion, just pay your bills on the date printed on your invoice.
The same works for other bills such as overhead bills (electricity, rent, etc) and invoices from suppliers and vendors.
If you are allowing your staff to get a salary advance, stop that practice right now. Not only are you teaching your staff to mismanage their money, you are giving away money that can be invested in more supplies, raw materials or inventory.
Do not buy more than you can handle. Again, this works for office supplies and inventory. Do not buy boxes and boxes of pens or several reams of paper on one go unless you get some very good savings by doing so. As for inventory, it’s no good if it just sits on your shelf. That’s stagnant money. Try to assess the current market so that you can make good decisions when it comes to re-stocking.
Make the most of every day your business is open
Motivate your staff to sell as much as they can on any given day. Again, if there’s inventory sitting on the shelf, that’s sitting money. If you are having a hard time getting rid of old stocks, hold regular sales. If you can afford it, offer a 50% off sale. What matters is you get back your investment and have the money rolling again.
Analyze your accounting reports. You might find some more ways to keep your cash flow moving and increasing.
If your business sends more than 5 items of mail daily, you can also save money with the use of a franking machine. With this machine you print your postage directly to the envelopes and thus are entitled to a discount. For up to date costs, please visit this site.
Get your clients to pay on time
Do not delay sending bills to your clients. If you’re doing this through snail mail, send the bills out earlier. If you’re having a hard time preparing your bills, invest in a franking machine. You can either rent it or buy a brand new machine. There are franking machines made for small businesses so you don’t have to shell out thousands of dollars. You can finish preparing your bills in seconds with the use of a franking machine. You also get discounts from the post office for sending properly franked mail.
Send out email reminders at a set date every month. Assign someone to keep track of your client’s balances and account status. Do not tolerate negligent clients. A bad paying client will eventually kill your business. It might be better to just let them go if they refuse to adhere to your paying standards. Find clients that are responsible with paying their bills.
Always send an invoice the same time you send out products to your customers. If you have an arrangement with your client such as ‘buy now, pay later’, sending an invoice with their order gives them an idea of how much they owe you and when they should pay.
Hold on to your money for as long as you can
Be wary of paying bills earlier than the due date. Sometimes, if you overlap credit card payments, instead of your bank thanking you for the advanced payment, they will charge you for ‘late’ payment for your next bill. This is because they will credit your second payment to the current month’s bill. So, it would look like you didn’t pay for your next bill when in fact you paid in advance. To avoid confusion, just pay your bills on the date printed on your invoice.
The same works for other bills such as overhead bills (electricity, rent, etc) and invoices from suppliers and vendors.
If you are allowing your staff to get a salary advance, stop that practice right now. Not only are you teaching your staff to mismanage their money, you are giving away money that can be invested in more supplies, raw materials or inventory.
Do not buy more than you can handle. Again, this works for office supplies and inventory. Do not buy boxes and boxes of pens or several reams of paper on one go unless you get some very good savings by doing so. As for inventory, it’s no good if it just sits on your shelf. That’s stagnant money. Try to assess the current market so that you can make good decisions when it comes to re-stocking.
Make the most of every day your business is open
Motivate your staff to sell as much as they can on any given day. Again, if there’s inventory sitting on the shelf, that’s sitting money. If you are having a hard time getting rid of old stocks, hold regular sales. If you can afford it, offer a 50% off sale. What matters is you get back your investment and have the money rolling again.
Analyze your accounting reports. You might find some more ways to keep your cash flow moving and increasing.
If your business sends more than 5 items of mail daily, you can also save money with the use of a franking machine. With this machine you print your postage directly to the envelopes and thus are entitled to a discount. For up to date costs, please visit this site.
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