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5 Ways to Improve Your Cash Flow

We all know that controlling the amount of cash coming in and going out, is vital for the success of your business. Here are 5 basic ways which could help you in the short-term to avoid taking out expensive loans or overdrafts.

1. Monitor your cash flows on a daily basis
This will help you to identify cash highs and lows. You will then be able to investigate the causes. You may discover that you can reduce stock order levels, that you have seasonal sales or can take better advantage of supplier lead times.

2. Invoice customers promptly
It’s surprising how many people get behind in their invoicing; it goes without saying that the earlier you send out an invoice the earlier you will be paid. Make sure your invoices are accurate – don’t give your customers a reason to delay paying you.

3. Increase your credit control
You should chase debts regularly and politely. Get to know your customers’ payment cycles so that you don’t miss their payment run, missing one could mean having to wait another month for your money.

4. Take advantage of supplier payment terms
Suppliers have different payment terms, so check each one and consider only paying an invoice when it is actually due. This is interest free credit.

5. Look at your prices
Have you reviewed your prices recently? Have they kept up with your increasing costs? Customers expect a small increase from time to time. Check out the prices of your competitors.

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