Does your business constantly have to deal with financial trouble? Do you struggle to pay your suppliers, taxman or staff on time? This is a common problem that is happening to several businesses of all sizes, the root cause being an ignorance of cash flow management, which is interregnal to the growth of a company. Cash is the lifeblood of your business enterprise, and if your business wants to be successful, then it’s time you paid attention to your cash flow management.
The world is currently going through difficult economic times. Today, banks are not supporting businesses as they used to in the past. At the same time, many businesses operate on a culture of slow payment to their end- suppliers. This is fast-becoming a top-down problem. This all means that you must take appropriate action and implement strong cashflow management into your company. You can start by managing your outgoing payment, while asking everyone who owns your business money to pay you back as soon as possible.
You can get rid of this problem by implementing a strong cashflow management process into your business. Ensure that you manage your outgoing payments and get everyone who owes you money to pay you back, as soon as possible. Here are some tips that can help you manage your cashflow (receivables and payables) with ease.
Tips on how to deal with your receivables:
- Get your customers to pay you back faster by offering small discounts (For example, a discount of 1-2%)
- Agree to invoice customers at regular intervals for long-term projects. Do not wait to bill your customers until the project is completely finished
- Ask your customers for a deposit or a part payment before you commence work on a project
- Make sure that you carry out a detailed background check on the credit scores of your customers
- Ask your team to send out correct and clear invoices promptly to customers. Send gentle reminders to your customers to pay up before an invoice becomes overdue
- Stop dealing with customers who refuse to pay on time. Ensure that you take legal action on customers who have failed to continually pay on time
- Get your business funding from your investors
Tips on how to deal with your payables: