5 easy ways to manage your payments & improve your cash flow
For every entrepreneur and business owner, cash is king. But how does one get to the point where you can anticipate your cash flow for the next few months? Quite possibly, you simply don’t have the time to sit down and plan your cash flow strategy, so we have put together 5 simple yet practical tips to improve your cash flow.
Yolande Geldenhuys, Operations Manager at FinGo
For every entrepreneur and business owner, cash is king. But how does one get to the point where you can anticipate your cash flow for the next few months? Quite possibly, you simply don’t have the time to sit down and plan your cash flow strategy, so we have put together 5 simple yet practical tips to improve your cash flow
1.Fast track payments.
Action how to cut down the time it takes waiting for customers to pay you. The longer you wait to receive payment, the longer it will take to boost your cash flow. Set up a debit order collection service that will automatically collect outstanding funds from your customers on a weekly or monthly recurring basis.
2. Incentive payments.
Offer a small reduction as an incentive to encourage customers to settle their payments early and charge a penalty for those who pay late. Highlighting this information on your invoice is standard practice as well as adding your payment terms, for example, 30 days.
3. Change your payment terms
If you currently allow customers to pay you in 60 days, change it to 30 days. This will ensure that the client is aware of your terms and advises their accounts department to pay you. And it doesn’t hurt to ask when the accounts department generally processes payment, which will allow you to manage your cash flow proactively.
4. Financial risk
We get so excited at the prospect of a new client placing a large order, we don’t stop to consider the risks. If you are offering credit or products upfront, do a financial check on the new customer before offering them credit. Companies like TransUnion and Experian can help you.
5. Offer various forms of payment
Consider new ways for customers to pay you by offering EFT, credit card and debit card payments. This allows you to receive payment almost immediately and you don’t have to worry about cheques bouncing or making cash deposits at the bank. While you at it, you may want to investigate a merchant facility if you are selling goods online or over the counter. It will allow you to broaden your service offering to a potentially larger market, and there are additional benefits of security and convenience that will add value to your customer and your business.
About FinGo: FinGo is a simple financial solution for all small and medium-sized businesses. Specifically designed to be affordable, easy to use and agile, FinGo offers affordable debit order collections, payments and an accounting solution from one secure online account. Contact us today for more information.