10 Tips To Improve Your Cashflow

Cashflow Protector in Cashflow problems | No Comments

Keeping your cashflow on track will give you a secure base to both grow your business and ensure your survival.

Recent tightening of the money market has made banks ever more cautious in their lending decisions so, speeding up slow payers is essential to ensure you have money to fund your business growth – after all it is your money slow payers are using to fund their businesses!

We have put together the following top ten tips to help your cash flow on track.

1. Ensure your terms and conditions are up to date and that they include payment terms and any interest that you can apply for late payment. If you update your T&C’s email a copy to all clients explaining that they have been updated and this latest version is the one you will be applying.
2. Quote payment terms on all quotations and tenders and state that the quotation is subject to your terms and conditions which if possible should be printed on reverse. Your client needs your terms of business when you quote or accept the order. It is too late to just print on the back of invoices.
3. Find out the name of the person responsible for raising payment, they are your point of contact for payment – not the person who gives you the order. It is this person who will help your cash flow.
4. When you contact a customer for payment, note what is said and be specific about agreeing future actions and, if appropriate, confirm these by email
5. If a promise of payment is made, ensure you diary forward to call them the day after payment is due, if it doesn’t arrive or to thank them
6. Never let chasing slide – be relentless – it is your cashflow that is suffering
7. The more lenient you are and the more you let payment slide the more your customers will assume you don’t mind waiting and are prepared to extend their credit.
8. Think long and hard before you resort to factoring. You probably won’t need it if you get your cash flow on track – why fund your customers?
9. Be realistic about what it costs you in both time and money to collect your outstanding invoices. Cash flow is essential for your survival.
10. If you don’t like chasing money and your time is more profitably spent running your business why not consider outsourcing to the specialists who will retain your customer goodwill, get you paid and keep your cashflow on track.