Keeping track of your business’s incoming and outgoing cash flows can be tricky, but is critical during uncertain times where revenue may fluctuate. Here are 4 simple and useful actions you can start today to help you manage and improve your business’s cashflow.
Here’s a quick look at what this article will cover:
- Invoice quickly
- Offer various payment options
- Use software to manage your cashflow
- Review your operational expenses regularly
The faster you invoice your customers, the quicker you’ll get paid. Rather than waiting until the end of each month, send out your invoices as soon as you have rendered a service or delivered goods. Your customers will still have 7, 30, or 60 days (whatever your business terms may be) to pay, but you’ll save yourself valuable time right from the start. With Lulapay, you can invoice your customers & get paid immediately while still offering them payment terms. Find out more about Lulapay here.
If this doesn’t work, you can also send payment reminders to those “late-comers” or simply pick up the phone and call them.
Offer multiple payment options
By offering your customers various ways to pay, including online options such as accepting credit cards, debit cards, or mobile payments, the more likely they are to pay you faster. For example, making use of mobile payments can get you paid on the spot as soon as the job is done. There are plenty of ways of doing this by using services such as YOCO, Zapper, Snapscan, and even Masterpass.
Use software to manage your cashflow
Managing the cash flows in and out of your business can be challenging enough, but dealing with the additional accounting and tax work that comes with it is another task. Consider using a cloud-based accounting system such as Xero & Sage to make managing this easier. More advanced systems come with built-in plugins like project costing, quoting, and inventory management to help alleviate the burden of system administration and automate these processes for you – giving you valuable time to focus on growing your business.
Review your operational expense regularly
Managing your cashflow isn’t only about the money that comes in, it’s also important to reduce the cash going out of the business as much as possible. Take the time to review your expenses and see in which areas you can reduce your operational costs. Avoid spending money on things that aren’t necessary for your business and choose wisely which areas you want to focus on. Make sure you cut costs only where you can afford to and don’t cut back in areas that may harm your business.
Understanding your business’s cashflow will not only help you plan for future growth & development but will also give you great insights into your businesses’ current financial state and how cash is moving within your organisation.