They say revenue is vanity, profit is sanity but cashflow is reality. Improving your cashflow can give you the money you need to carry you through lean times or help grow your business.
Here are a few ways to improve your cash inflow:
- Collect accounts receivables faster:
- Ask your customers to pay you in advance. If not the full amount, ask for a 50% deposit up front
which you can use to buy materials. - Ensure that your clients are invoiced immediately after the completion of a sale.
- Monitor your accounts receivable. If clients are not up to date, give them a call.
- Offer a discount to clients that pay quickly.
- Insist on doing credit checks on all new non-cash customers.
- Go after more cash business and refuse to do business with slow paying customers.
- Encourage your customers to pay using their credit card.
- Ask your customers to pay you in advance. If not the full amount, ask for a 50% deposit up front
- Pay accounts payable slower
- Ask your suppliers to allow you to take 30 or 60 days to pay.
- Pay by credit card to take advantage of the delay between your purchase and when you have to
pay off your card balance.
Photo credit Alireza Teimoury
