Whether you’re looking to build up your profits or simply navigate your way through the current cost of living crisis, learning how to improve cash flow within your business is a great place to start.
After all, improving your cash flow “will help you manage your accounts and ensure you always have enough funds available to pay your bills and grow your business.” Conversely, poor cash flow could mean that you struggle to stay up to date with payments and land yourself (and your company) in a difficult position.
With that in mind, here are some simple tricks you can use to improve cash flow within your business.
Accept Different Forms Of Payment
Diversifying customers’ payment options is one of the easiest ways to improve your cash flow. For example, digital payments make paying for a product or service quicker and easier for all parties. However, businesses should also ensure they accept both ACH and EFT payments, too – especially as the latter is a much cheaper method of money transfer. You can find out more about the difference between ACH and EFT payments here.
Chase Up Late Invoices
Late invoices are more than just an annoyance – they could be costing you thousands each year. After all, not only does this mean you’ve carried out work that you haven’t been compensated for, but you also waste valuable time chasing these payments too. As a result, it’s important that you know how to deal with late payments and so promptly. For example, you should send out automated payment reminders, or add interest on late payments.
Set Payment Expectations Early On
One of the easiest (and most efficient) ways to ensure your business has excellent cash flow is by setting clear expectations with your customers/clients during the onboarding process. For example, you should let them know exactly when you’ll expect payment – whether you’re taking some money upfront or will send the completed invoice once the work is completed. Setting expectations gives them time to get their money in order, meaning they are more likely to pay promptly. Be sure to have these expectations in writing, too, such as within your contract or initial emails to each other.
Focus On Your Customers
Building upon (or improving) your current customer success strategy is another great way to improve cash flow because it increases your earning potential. After all, the more you can foster customer loyalty, the easier it will be to grow your brand, meaning you earn more money each and every day. Fortunately, there are many ways in which you can work on strengthening your relationship with your customers – from asking for feedback to hosting focus groups so that you’re able to better understand them. After all, the more you ‘know’ your customers, the easier it will be to provide them with the exact services or products you are looking for. This is also a great way to show your customers you care about them, which means they’re more likely to become repeat customers.