Ten Ways to Improve Your Cash Flow

Here are our top ten tips on avoiding cashflow problems in your business:

  1. Manage your cash:  Monitor payments in and out, late payments and stock levels. Check month-to-month changes and quarterly trends to spot where cashflow is squeezed.
  2. Invoice customers without delay:  Make time to send out invoices promptly and collect the information you need to send out invoices when you make a sale or set up a customer account to save time. Give a clear payment is due date every time.
  3. Offer payment options:  Go for a bank transfer first – you get the money quicker, but accept cash, cards and even PayPal.
  4. Give early payment discounts: Tempt a customer to pay promptly with an early bird discount.
  5. Monitor payments: Keep an eye on your aged debtors list and chase late payers with a polite prompt.
  6. Set credit rules: Manage your cashflow instead of reacting to customer demands. Credit control is about managing non-payment risk to your business.
  7. Accept some customer’s won’t pay: Have someone on the staff to follow up late payers with telephone calls, friendly warnings and if all else fails, debt recovery through the courts.
  8. Pay bills when they are due: Don’t pay early unless it suits you – pay invoices on their due date to keep your cash in the bank for as long as you can.
  9. Ask suppliers for credit: Suppliers want your custom and will often extend payment deadlines to keep your business.
  10. Don’t tie up cash in stock: Excess stock means money tied up in the warehouse that could otherwise be in your bank account. Keeping track of your inventory will help to keep stock levels just right.
The Procurement Group

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