Cash Flow Solutions to Help Grow Your Business
Cash flow is one of the most important things to manage in a business, as it ensures that it is running smoothly and has the necessary funding for day to day operations. When cash flow is significantly hampered, it can seriously affect a business’s ability to run, and in some cases bring it to a grinding halt. Here are some solutions for cash flow problems.
Invoice Finance
Every business owner who invoices their customers will understand the drudgery of payment waiting times, which usually range from 30-120 days. Having to wait such a lengthy period of time for payment of an invoice can cause major issues with cash flow, so it could be worth exploring invoice finance through a company like Marketinvoice.
It involves the lender providing a large proportion of the invoice’s value in an upfront payment (minus their fee), which immediately bypasses the invoice payment waiting time. When the customer eventually pays, the remainder of the money is then forwarded to you, bringing your cash flow to a healthy level.
Incentives
Another way to help keep cash flow at a good level would be to offer incentives for customers to pay on time/early. You could do this through adding interest to your invoices, so that the later the customer pays, the more they have to pay.
Another, possibly more effective way would be to offer a discount for early invoice payments, which would encourage customers to get the most out of their money by paying much quicker. Whichever way you choose to incentivise punctual/early payment, make sure the charges/discounts are fair and competitive.
Review Pricing
The price you put on your products/service is incredibly important in achieving sales. If your prices are too low, the perceived value of what you are selling may also be low, and thus undesirable to a customer. If your prices are too high, you are probably losing some custom to competition.
It is important to get the balance right so that you are achieving as many sales as possible. This will ensure that there is a steady flow of cash into the business, and that you are competitive within the market you are operating.
These are just some of the ways you can improve the cash flow in your business. It is important that you calculate your various incomes and outgoings to see which areas could be improved, and do whatever is necessary to boost cash flow and stimulate business growth.
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