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10 Tips to Keep Your Cash Flowing in 2017

Sarah Bean - Tuesday 10.01.17, 16:50pm

1. Make sure your Terms and Conditions are clearly stated and send them out with all confirmations and invoices.  Don’t be afraid to send a reminder as the payment date draws near and start chasing payment as soon as it is overdue.

2. Offer your customers an early payment discount.

3. Credit check new customers and before increasing credit limits. If there are any doubts insist on payment up front. Always take a deposit to cover your costs in the case of bespoke work which couldn’t be sold on to anyone else.

4. Don’t give your customers a reason to delay payment; check invoices before you send them out. Issue invoices as soon as a job is completed, addressed to a named individual if possible. Certain information is required by law; make sure you have provided this.

5. Use invoice finance to make the cash locked-up in your invoices available from Day1. The money freed up in this way can be used for any business purpose.

6. Try to negotiate better payment terms with your suppliers.

7. Avoid tying up cash by holding too much stock, however tempting the discounts; plan ahead and be aware of customers’ buying patterns.

8. Reduce costs where possible; for example, shop around for better deals on mobile phones, investigate ways of reducing energy costs, Skype meetings where possible, rather than travel to them. Encourage staff to suggest efficiencies – and reward them for their input.

9. Keep all your records in order so you can keep track of the cash going in and out of your business. This is more important than ever, with HMRC planning to conduct spot checks on companies.

10. Keep a running cash flow forecast, so you can identify bottlenecks early on and plan what you are going to do before they become major issues.

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Tags: Cash Flow

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