Poor cash flow management is one of the main reasons 50% of small businesses fail during their first five years. For small businesses that have faced challenges over the last few years, that might seem like a scary statistic.
But cash flow management doesn’t have to be complicated.
Setting clear targets, promptly invoicing clients and putting the latest technology to good use in the business can be simple but effective means of managing cash flow for small businesses.
Here are three simple methods you can employ in your small business to manage cash flow for your business.
Send Out Invoices Quickly
By promptly sending out invoices to your clients and customers, you are avoiding delaying the payment. There might be roadblocks and delays in receiving payment that can’t be controlled on the client’s end, but avoid adding to them by waiting to send out your invoice. Make time in your week to create and send out invoices to bring in the cash as soon as possible. You may even want to set aside a day in the week or fortnight to action invoice deliveries.
Offer Different Payment Options
Avoid making payment an awkward and time-consuming process for you and your client by giving them plenty of options for paying. Cheques, Eftpos, paying online, or even cash can be valid methods of payment – and some are a lot quicker than others. Work out what works for your business and your customers.
Keep Detailed Records Of The Business’s Cash Flow Situation
Unless you keep maintained and accurate records, it’s unlikely that the cash flow situation of the business will be clear to see. Keep detailed financial records to refer back to, such as how many invoices are currently being processed and what bills need to be paid.