Cash flow is essential for a business regardless of size or industry. Without access to money, your business could be in big trouble. While starting and running a business implies a certain amount of risk, it’s also important to do what you can to mitigate it. To help you improve this area of your business, we’ve put together this list of 6 quick cash flow fixes.
Analyze a Cash Flow Forecast Every Quarter
The purpose of creating a cash flow forecast every quarter is so that you can preview the expenses of your business. This helps you understand what you need to make to become or remain profitable. If you’re currently not making as much money as you’d like, a cash flow forecast can help you spot areas where you could better control your expenses. A cash flow forecast will also help you determine when you can expand a marketing campaign, add new services, or expand your team.
An obvious (and easy) way to improve your cash flow is to reduce your expenses. For example, take the cost of social media management. Even if you use an automation tool, you may not be getting the most for your money. Look around to make sure that you’re getting the best deal. Another easy area to reduce expenses is to look at your office supplies. Is there a place you can get them cheaper? If you need extra help but can’t justify the overhead, full time pay, and benefits, consider partnering with Clients ARM. We offer several helpful services. On average, our clients save 40% when compared with the cost of hiring an employee. What could you do if you had a 40% savings on just one expense?
Stay on Top of Your Billing
Your clients expect to get an invoice either at the time services are provided or at the end of a billing period. Make sure that your invoices are created and sent when they should be. When clients don’t receive their invoices on time, they may presume that they don’t owe you any money. You may get paid later or you may have to hunt down the payment. Either way, you’re setting yourself up for a cash flow problem.
Don’t Neglect Past Due Accounts
Past due accounts create a cash flow problem for your business. While performing collections probably isn’t your most favorite business task, it’s necessary. The longer an account goes unpaid, the harder it will be for you to get paid. Start calling on past due accounts the day they become past due. Sometimes a quick reminder is all a client needs. Calling also gives clients the opportunity to ask questions they had that may have stopped from paying your bill.
For older accounts, get help. Clients ARM provides both first and third party collections services. We help businesses get paid.
Offer Convenient Payment Solutions to Clients
Just a few years ago, small businesses were rightfully concerned with the cost of having a credit card reader. Many chose to pass on the cost to their clients or they would simply stop accepting credit or debit cards. Now, though, there are several inexpensive online credit and debit card payment processors. Many can be used directly through your online billing software.
Providing online payment solutions for clients is convenient for them and for you. They’re likely to pay faster. The faster they pay, the sooner your cash flow improves.
Review and Renegotiate Contracts with Your Suppliers and Vendors
At the end of the term of a contract, review it. What worked well for you? What didn’t work well for you? If the other party is interested in renewing the contact and what you received was valuable, you should renegotiate the terms of the contract. Do some research and find out what other suppliers or vendors charge for what you’re receiving. How does it compare to what you had in your contract? That may give you some negotiating power.
To learn more about how you can improve cash flow for your business, schedule your free consultation with Clients ARM.