3 Tips For Getting Better Cash Flow For Your Small Business
As a small business owner, it can be hard to find the balance between doing business at any cost and making sure that you’re protecting yourself financially. Because of this, many new business owners find themselves struggling with achieving a consistent and positive cash flow.
Luckily, there are some things you can do to ensure that you’re getting the money that’s owed to you and that it’s coming in in a more timely manner. To show you how this can be done, here are three tips for getting better cash flow for your small business.
Make Deposits A Requirement
Especially if you’re a business that runs on orders being fulfilled, it’s important that you can protect yourself financially to ensure that you get paid for the work that you put in. To help with this, Michael Lewis, a contributor to Money Crashers, recommends that you require a deposit whenever someone places an order with you, especially if the order is a large one.
By doing this, you’ll increase the chances of getting paid in-full for the work that you’re doing and getting that money sooner rather than later. Depending on the type of work you’re doing, how big the order is, and how much you trust the person or entity placing the order, you might want to require a deposit of at least 50 percent of the total price at the time the order is placed.
Offer A Discount For On-Time Payments
Sadly, many people feel that they can take advantage of small businesses because they don’t have to experience or infrastructure to handle late payments as well as larger corporations.
To combat this, Dan Moskowitz, a contributor to Investopedia.com, recommends that if you’re having problems getting people to settle their accounts on time, you find a way to offer discounts for on-time payments.
In some situations, offering a discount on the amount they own might be incentive enough for them to get their payments in on time. For others, you might want to consider future discounts on orders. By doing this the right way, you can create a win/win situation where you get the money you’re owed and your customers or clients feel like they’re getting something out of the arrangement as well.
Remind Past Due Accounts What They Owe
Although it can be uncomfortable to have to do this, one of the best ways to get your customers or clients paying what they owe you is to remind them. To get this done effectively, Bruna Martinuzzi, a contributor to American Express, recommends that you pick up the phone and talk to them, as speaking with someone rather than just being sent a letter or email, can give the personal touch some people need to feel obligated to pay what they owe.
If you’re having cash flow issues due to unpaid accounts, consider using the tips mentioned above to help you get these financial issues settled.