When running a business it is key that you make money. No matter how much you might sell, if you don’t collect the money then you are destined to go out of business. Many business owners forget to take time out to ensure there managing there cash flow and receiving money for sales.Remember cash-flow is not the same as profits. You may have a profitable business but a negative cash-flow. Monthly cash flow statements should be prepared so that you don’t get caught unexpectedly, and you have cash to handle day to day running of the business.
Here are tips to improving your cash flow:
1) Provide invoices immediately
By not invoicing instantly after a job you are slowing down the process of collecting money. This could mean that the customers may forget the details of the job and may inquire about the details of the work, creating more delays. Also if you forget to invoice someone immediately you may forget to invoice them all together- many of business owners are usually rushed of their feet so this can be a hectic time.
2) Faster payments
Being paid quickly should mean that you have a better cash flow. Your suppliers could be asking for payments up front whilst you are waiting weeks to be paid for your work, this typical scenario puts businesses into a cash-crunch. The easiest way to improve your cash-flow would be to use online-based payment services, this way it is easy to accept payments by online bank transfers and usually means the money should be instantly in your account.
3) Follow up
By chasing up on outstanding payments you can keep a check on your balances. Once a week would be a suitable time frame to chase up clients outstanding invoices, be sure to mark down when the client agrees the payment will be made and then if this isn’t followed through then you can chase again. With cloud-based accounting software you can check your accounts receivable listing from anywhere by one click of a button. You can resend the invoice multiple clients meaning it saves time as you will not have to go into each individual client.
JacRox is a modern and forward-thinking online proposition designed to make managing your business accounts easy and straightforward. To find out more speak to a member of our Manchester Xero accounting team call 0800 020 9542 or email hello@JacRox.co.