We often hear people saying 'cash is king' and 'cash is the lifeblood of the business' but how do you get more cash into the business and improve your cash flow? These things are not talked about as much and so we thought it would be useful to list our top seven steps for improving your cash flow.
Collect funds earlier - There is no need to wait until the end of the month to invoice, why not invoice as soon as the work is completed?
Delay payment where possible - There is no need to pay a bill before it’s due, the cash will better serve you in your business.
Offer a new product or service with a fast action discount - If you anticipate there is going to be a cash shortage then an incentive or discount with a short shelf life can sometimes entice people to make a purchase.
Advance bill for new client or customer work - If you have a new client or customer you can always invoice or bill on a proforma basis initially if there is a need to improve cash flow.
Liquidate any assets you don’t need - There may be equipment or stock that you no longer need and maybe this could be sold and the money added to the cash flow of the business.
Get cash in by offering payment plans - Sometimes payment plans can be helpful to your client/customer as well as your business. Plans often have an initial upfront payment and then staged payments until the bill is settled and this can make it much easier to manage your cash flow.
Reduce overheads - When was the last time you reviewed your overheads? Could you reduce the amount you are paying out to others and increase the cash in your own business?
These steps may not be suitable or relevant to all but they are most definitely worth considering if there’s a need to improve the cash flow in your business.
Get in touch if you would like to have a chat about how we could support you and your business. Email: accounts@cubeaccounting.co.uk Tel: 01788 815 017