Being able to manage your business’s cash flow is essential given its role in helping you pay your staff and your bills on time.
Cash flow also acts as a safety net should something suddenly go wrong in the business and you need to act fast. This is why a profitable business with a negative cash flow isn’t always a great thing.
To help you gain control over and boost your cash flow, here are four useful strategies that you can implement, whether you’re an upcoming small business in Liverpool or a major industry name in London.
Find ways to get clients to pay faster
One of the leading causes of cash flow problems is late payments. It’s not always possible to have your clients pay on time, but this can take its toll, especially on small businesses. Should delays extend further than 30 days, your business could be in danger since you’ll need to foot the bill somehow.
To prevent late payments, you should utilise cloud-based online invoicing software. This will automate invoicing processes and automatically send out communications, making sure customers are informed on time and reminded if the payment is late.
You may also choose to take out invoice insurance, which protects you against unpaid invoices. When you eventually receive the payment, it will be a reduced amount based on your policy. That way, you protect yourself in case the worst happens, ensuring your cash flow remains strong.
Hire experienced professionals to help you out
As a business owner, you’re likely already swamped with client calls and plans for growth, making it challenging to put time aside to manage your accounts. Consider bringing a fresh set of eyes to your business instead who is specifically trained to handle your accounts.
By conducting an in-depth examination of your finances, these accounting experts can identify where the cash flow problems lie and suggest ways where expenses can be saved. They’ll also manage your financial records and ensure compliance with tax regulations, potentially saving you from fines and finding ways to reduce your tax burden.
Reduce unnecessary expenses
You’d be surprised by the amount of money businesses waste on unnecessary expenses each year, from untargeted marketing efforts to unused office space and excessive employee numbers. Identifying where you’re overspending can be difficult, so it’s important to first conduct a business audit.
From the audit, you’ll identify areas where you can cut costs completely or find ways to reduce your expenses. For example, if your employees are working remotely more often, you could rent out your workspace or downsize.
Additionally, you may be paying for employee perks that aren’t being used or aren’t beneficial, such as financial wellbeing programs and sleep apps. While they are great offerings, you could save money and increase your cash flow by getting rid of these.
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3 ways to boost your business’s cash flow