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HomeResource7 Ways For Improve Cash Flow Management For Business

7 Ways For Improve Cash Flow Management For Business

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Whatever be the type of business you plan to undertake making decisions is a vital part of it. Also needs to be faced different types of challenges of which cash flow is considered to be the biggest one. It is undoubtedly the lifeblood for any business! However, it is often the most underestimated one. You need to pay for utilities, stock, rent, wages, etc. This will require having sufficient amount of cash flow to ensure smooth business operation.

Related Post: The Realities Of Cash-Flow Management For SMBs

7 cash flow management approaches to take

1. Streamlining invoicing process:

You might postpone invoice generation and sending to concerned parties to focus on immediate business priorities. This will only negatively impact the DSO (Days Sales Outstanding). Thus collecting receivables will only take a longer time. Hardcopy invoices are likely to further delay payment receipt. This way, your business will not be able to leverage the availed opportunities. Installing invoicing apps can help tackle such challenges. It can be done with just a few clicks.

2. Updated cash-flow forecasts:

Generate, maintain likely peak forecast. It should be based upon previous sales. The forecast is to be of expenditure and sales related troughs and peaks. Prediction of expected expenditure like taxes, equipment, wages and rent against income from sales can help identify need for additional capital. This is a good investment strategy to follow. There are numerous online accounting tools that can prepare automatically such forecasts. This way, you will be able to monitor effectively and manage real-time cash flow.

cash flow forecasts Online accounting tools

Also Read: Top 15 Finance Business Ideas for Beginners in 2022

3. Reduce accepting of cheques:

Businesses across the globe are shying away from cheque usage. It is considered to be an inefficient payment method concerning payment speed and cost. Some countries even have been targeting to become cheque-free by 2025. Lack of awareness and habit is what makes many businesses to still follow this method. Bank or card transfer can ensure faster payments. This will improve your financial systems, while modernizing brand perception.

4. Define payment terms:

While issuing invoice, make sure to communicate clearly the payment terms. In case the customer fails to pay by the stated due date, then make follow-ups. You can find investment strategy that will worth the try. The right tools can help notify when invoice email has been opened by your customers and about overdue payments.

5. Accept payments at all places:

Many first-time shoppers do not seem to trust online shopping portals even well-established ones. Providing cash-on-delivery facility can help address such customer needs. This option also attracts new customers while retaining old ones especially those who prefer to pay in cash. Also no hidden costs are associated with it. Moreover, non-delivery rates get high caused by lack of change or cash at hand. Install mobile POS solution as it will allow you to accept mobile and card payments. Making decisions favoring your customers will ensure increase in traffic, revenue and sales.

Also Read: Benefits of Digital Printing Services

6. Modernize POS:

Card and mobile payments are witnessing growth as there is increased demand for electronic payments. Businesses not in a position to accept the latest payment methods will have significant impact. Installing payment terminal can help address such issues. Such financial systems will allow you to initiate accepting payments quickly through debit and credit cards, devices with NFC or contactless options.

7. Leverage interest-free credit:

Certain suppliers may avail options like credit card payments. You may get interest-free credit for 55 days that will impact positively your cash flow. But do take acre to schedule payments. This will help prevent high interest charges and repayment fees. Also discussing with your suppliers can help derive huge discounts for making early payments.

Therefore, implementing proper cash flow management can help your business to have cash when needed the most.

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