Even though your business may be thriving (meaning, customers are buying your products or doing business with you), you can still have an unhealthy cash flow. And, as we all know, cash flow is the lifeblood of your business – without a steady cash flow, it will be difficult to keep your business running properly. So how do you keep your cash flow steady and prompt your clients to pay on time? Here is an all-important guide on how to keep your cash flowing as a business.
Know your customers’ payment behaviour
If you want to improve your cash flow, you need to be aware of your customers’ payment behaviour. Different customers have different habits when it comes to settling their accounts. Analyse your customers and try to see a pattern when it comes to the settling of their dues. Perhaps one customer likes settling their invoice at the end of the month, whilst another customer likes settling their invoice at the beginning. Find this out – it can help you plan the management of your cash better.
Issue invoices early
For many businesses, sending out invoices early should not be an issue. But you’d be surprised to realise that sending out invoices can easily be neglected, especially if you have a lot of other things to worry about. What you can do to make sure your invoices are sent early is to assign one person to do the task. If you have a small business, you don’t need to hire someone to focus only on this – instead, just have one of your existing staff spend an hour each week sending invoices. Additionally, it would be a good idea to have a well-organised system of filing so you have all information right at your fingertips when you need it.
Be a smart payer
Whilst it’s important to settle your bills on time, it’s equally important to be smart about it. What do we mean by this? Simply spread out the payment of your bills so you will always have some cash on hand when necessary. You don’t have to settle all your bills at the same time – just make a list of priorities when it comes to your bills – the ones that get paid first, and the ones you can afford to pay the last. Bills such as rent, utilities, and salaries should be a priority, but bills from suppliers and wholesalers can be more flexibly paid, as long as you let them know when you can pay them as well.
Get professional help
If you feel that you need extra help when it comes to managing your accounts and cash flow, then you should enlist the services of an accountant. Accountants central London from firms like GSM & Co can help you with all your accounting and finance needs, thereby making your work easier and helping you run your business more smoothly as well.
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