Five Tips for Better Cashflow
1. Invoice promptly
Often small businesses concentrate on delivering the goods and services to their customers but then take time raising the invoice. Sometimes businesses even forget to raise invoices at all, and customers won’t be the ones to remind you. There's no excuse anymore. Using online accounting apps, invoices can be raised on the go. Repeating invoices can be set up to automatically be raised each month.
2. Offer numerous ways to pay
In today’s world the last thing most businesses want to do is pay by cash or by cheque. Invoices can be paid via online banking, or via low-cost credit card payments services such as Stripe, which offers an online link within your invoice. Physical card payments can also be taken via low-cost services such as iZettle which connect a customer’s card to a phone, tablet of laptop. Even direct debits can be set up now for little expense, using services such as Go Cardless.
3. Keep in touch
Don’t send your invoice and automatically expect customers will pay it. Speak to them to make sure they received the invoice, that they agree the charges, and that they can give you a payment date.
3. Manage payments
Keep on top of VAT, corporation tax and PAYE liabilities – HMRC will have no trouble chasing you. Likewise, your suppliers will want payment on their agreed terms just as you do off your customers. Late payment to your suppliers means you run the risk of reduced credit, higher prices, or worse still, no credit at all.
Use accounting software tools, such as Xero, or Crunchboards to forecast future sales, purchases and tax liabilities, and to highlight any future crunch points in cashflow. Even a basic spreadsheet is better than nothing!
Do all of the above and you'll be on the road to a secure cashflow.
Don't, and you're risking the future of your business.
And do you really want to risk your business?