One of the most difficult and challenging aspects of small businesses is cash flow management. Having continuously nudging customers for paying, take the valuable time of people along with can be really disheartening. Indeed it is tiring! If you are also exhausted of consistently being on such a journey of chasing customers for payments, you definitely need to consider these few tips of ways to improve the cash flow for small businesses.
1: Make Use of Tools That helps To Stay On Track
Keeping a constant track of the available cash along with expected outflow and inflow of money throughout the entire month can be a crucial step for managing the cash flow. Even when it is a great step, it can really become time-consuming for any busy business owners.
In order to get over this tedious and tiring job, all you need is to make use of the online cash-flow management tools. There are numerous options open for you like UpYourCashFlow, Pulse, Float or Cushion. Ensure making in-depth research on these tools and use one of them as per your business requirement and budget.
An eagle’s eye on the cash flow is one of the preliminary steps of improving the small business cash flow.
2: Open Several Modes of Payments For Customers
While examining different ways to speed up the cash flow or looking for ways to enhance small business cash flow, you need to find ways to speed up customer paying procedure.
You really cannot force your customers every single day, the only thing you can do is to find out different other payment options like credit cards, Automated Clearing House (ACH) or debit cards. Also take into consideration about the mobile payment or digital wallet solution like Apple Pay, PayPal, Venmo, Square and even Bitcoin.
The more options you open for your customers, the faster and timely cash you can observe appearing on your account.
3: Check the receivable to the payables
One of the most common things where owners hardly pay attention is to check the payment terms for the suppliers along with comparing those with the customer payment terms. Make sure you pay attention to enhance the small business cash flow.
In case it is necessary to pay the supplier within the next 30 days and you are giving your customers the time of paying within 45 to 60 days, it is creating a break in the cash flow. When you are looking for better cash flow management procedure, you definitely need to focus on it.
Don’t forget to match the terms of payment with the suppliers to the customer terms. Also, consider checking the penalties for late payments. Make sure you take the same step for the customers in order to stay away from late payments. This will make sure that your suppliers are getting the amount on time along with you can easily keep an account on the cash flow.
When it comes to cash flow management, make sure you keep a track on everything. You will definitely find some customers who are habituated to late payment, to maintain the cash flow consider late payments fee. Moreover, you can also opt for working capital loans if you don’t have enough funds for your small business.