The fundamental of cash flow management is knowing how much cash you have available for your business. You will know precisely how to manage this business imperative through consistent cash flow monitoring effectively. But what are some other tips to ensure you protect your cash flow? How can you be sure you have the funds to make big moves?
Here are seven essential tips:
Regular monitor your cash flow
Any reputable commercial finance broker will tell you you should regularly monitor your flow. You should keep a monthly record of incomes and outgoings to help you spot any obvious shortages. Unseen shortages can be disastrous for business, so be on top of them through consistent monitoring.
Reduce your costs
Your cash flow statements will help you decide where to reduce costs. You may have some recurring expenses that aren’t viable – these have to go! They could be frequent services, rent, unnecessary products, or utility bills, but whatever they are, they should be cut. Most business owners can cut costs in various ways – you need to find out where that is for you.
Chase down late payments.
Depending on the nature of your business, you may need to chase down late payments. But we all know this is a touchy subject, and you don’t want to upset ongoing customers just because they’re behind on one payment. You might like to offer them benefits or discounts for paying on time. This may mean reducing the full payment, but at least you will have a healthier cash flow at the end of each period.
Sell off unused equipment
Got some equipment you never use. It happens. The last thing you want is to be stuck with equipment you will never use. After all, you can sell it to help you boost your cash flow. You can even rent it out, depending on what equipment it is. This is one of the most efficient ways to generate cash flow, which shouldn’t be overlooked just because it seems like a nuisance.
Pick up commercial financing
Consider a cash flow loan. This is a loan you will receive that you will have to pay back when you generate more revenue. Be sure to speak with a highly experienced and qualified finance broker before taking out such a loan. They can help you get the best option for your business needs and potentially help with a lower interest rate!
Try renting equipment
Nothing is worse than purchasing equipment you only need a few times. Not only is it a waste of finance, but it also takes up what could be vital location space. So, if you only need, for example, safety barriers for one job, be sure to rent them before forking out thousands on your own set.
Make invoices your own
You should always design your invoice templates. This makes it easier for clients to pay. They should be clear and easy to read so the client knows exactly what to pay without fear of hidden costs. Also, make them tech-savvy by sending them through email. It is the safest and quickest option for having your invoices paid on time. What’s more, invoice platforms contain payment reminder functions you can send out if the client is late!
All these 7 tips are very essential to follow in order to manage your cash flow in an efficient manner. You are guaranteed to reap the benefits if you can follow these tips and tricks in the best way possible.