All businesses will likely experience cash flow problems at some point, but that doesn’t mean you have to put up with them indefinitely. You should always be looking at ways to free up cash flow in your business, as well as ways to create more of it. Even if you don’t have issues with cash right now, bearing some of the pointers here in mind could be a very smart move for the future.
Start using the tips outlined here now, and you should find you have more cash to play with in no time at all. Read on to learn more!
1. Give Customers An Incentive To Pay Up Quickly
Usually, if a customer has a long time to pay, they’ll take advantage of that. Don’t be surprised if they don’t pay until the very last second, or even pay late. This doesn’t mean you should send them threatening emails or anything – it simply means being smart about asking for payments. Giving incentives for them to pay up quickly, such as a small discount, is a great idea. You could also consider adding on penalties when they don’t pay on time. Bear in mind that it’s probably better to be understanding in certain situations – for example, a client may genuinely be experiencing trouble and be able to pay with a plan put in place by you.
Just remember, being firm is also important. This is your business, and you can’t afford to lose money!
2. Use A Business Credit Card
A business credit card can be a smart way to get cash fast, providing you’re not going to go into too much debt or mess up your finances because of it. Using this for large purchases can give you further protection, so in many cases, it’s a smart choice.
3. Work Closely With An Accountant
An accountant has likely been looking at money and figures a lot longer than you have, so working with one to figure out how can you free up some money is a good idea. If you have one taking care of your taxes, consider meeting with them to see what sort of advice they can give you. They may already have some ideas on where you’re overspending.
4. Take Another Look At Your Budget
Take another look at your business budget and closely assess where you could potentially cut back. Chances are, there will be a few places on the budget you can cut back if you really look. You don’t need to buy new equipment all the time, for example. You can buy second hand, or see if you can get equipment on loan. Think outside the box and you should come up with a number of ideas that will help you to save money.
5. Explore Other Options For Loaning Cash
You don’t just have to rely on your business credit card for cash. Businesses often have a ton of other options they can use when they need money. Asset based lending services are a good way to get a large sum of money fast. If this is what you need, you can contact Equify to learn a little more about it. However, there are even more options, such as peer to peer lending. There are truly so many options, you don’t need to despair if you need to get access to cash fast!
6. Arrange New Contracts With Trusted Suppliers
If you’ve been working with the same suppliers for a while, consider speaking with them to determine if you can come up with new contracts. If they trust that you’ll be working with them for the foreseeable future, chances are, they will agree to give you some kind of discount.
7. Invest In Your Business
Investing in your business may cost you money right now, but the fact is, investing money in the right places will usually get you a great return. Perhaps you need to invest in the development of your staff, or your marketing. Whatever you invest in, make sure you track your results you know for sure whether your chosen methods have paid off. You can’t be afraid to put money back into your business. It’s the best way to make it grow!
8. Take A Look At Your Current Insurance Policies
You should take a look at your insurance policies every 6-12 months to make sure that you’re not being ripped off. Insurance changes year on year, so if you’re not taking the time to review your coverage, chances are you’re wasting money. Don’t hesitate to switch if you can get a better deal – use a comparison company to make sure you find the right deal for your situation. Your current insurance company may even be able to match a quote if you call them and tell them about it. Don’t be afraid to get them to fight for your business!
9. Perform A Common Area Maintenance Audit
Your common area maintenance fees include things like cleaning, parking lot maintenance, and more. They are determined by the property owner, and are usually charged at a cost per square foot basis. Of course you could simply trust that these fees are being calculated properly, but this could also mean that you’re losing money unnecessarily. You’ll need to make sure that your lease agreement gives you the right to do audits like this. If it does, then you should definitely consider doing them to ensure they are right. They can take a lot of time and are admittedly pretty boring to do, but they can be invaluable if you find errors and overcharges. Even if you’re being charged just $1 more per square foot, you could easily save thousands each year.
Whether you’re going through a tough time financially or not, you should continuously look for ways to free up funds in your company. These ideas are just a few ways you can start out looking for ways to improve cash flow in your business.
Have you found a few smart ways to free up cash and improve cash flow? Leave your comments below!