As a small business, cash flow can be one of the most difficult hurdles to clear. Keeping a steady stream of money flowing through your business every month at a reliable rate is difficult. Doubly so when you’re faced with the multitude of other distractions that come with trying to grow your business. Here are three simple tips for improving small business cash flow.
Take advantage of software
There are a number of specifically designed pieces of software to help you keep your numbers clear every month. A quick Google search will give you a variety of options, depending on your business. A good place to start if you’re looking for something clean and simple to use is Cash Flow Manager.
Whichever piece of software you choose, it’ll allow you to keep track of the money that flows in and out of your business. This will give you a clear picture of anywhere that savings can be made, or where money is being tied up – for example, unpaid customer invoices. It will also help you form more accurate projections for the next month.
Vary your payment options
The marketplace has developed to the point where customers demand a variety of payment options for their purchases, and you have to keep up. It can seem like a big investment when you’re just starting out to get electronic and contactless payment terminals, but it’s an investment truly worth making.
Anything you can do to improve the convenience with which customers can pay will further encourage them to buy from you; it’s that simple. If you’re only going to accept cash/ cheques, you’re limiting your ability to take advantage of impulse purchases and bulk buying, both of which are essential for stimulating small business cash flow.
Be less forgiving
In the interest of forging customer relationships when you’re an SME, it can be tempting to extend the payment terms for loyal/ high-value customers. This can have a serious effect on your cash flow, however. So, if you want to maximise your earning potential, you’re going to have to learn to set stricter deadlines.