Most businesses have suffered financial difficulty over the past few years, even without all of the turmoil going on around us most businesses will have made use of cash flow services before, now though, for many a business, it’s a little more than a ‘nice to have’ and more of a ‘requirement’ in order to keep their business going. If you are interested in finding out how to make you cash flow, flow a little smoother take a look at the following, proven solutions;
Offer Early Payment Discounts
Buyer’s love a good deal, and giving consumers a reduction of some kind for paying their bills on time creates a situation for both of you to achieve settlement. Of course, the earlier you get the money in, the better, early payments will benefit your cash flow.
Organize a Purchasing Cooperative
Consider the term ‘two brains are better than one’ in terms of numbers, and find other like-minded businesses prepared to pool their funds in order to negotiate cheaper costs with suppliers. You could consider the process similar to that of cash flow lending for businesses but, on more of a private level. A lot of the time, the suppliers typically only give large discounts to big companies who buy in bulk so it can be useful to have some extra buying power.
Don’t buy outright, instead, lease and save capital
Because leasing materials, equipment, and real estate is considerably more expensive than buying, it may appear paradoxical to someone who is just concerned with the bottom line, or your income after all expenses have been paid. However, unless your organization is cash-rich, you’ll want to keep a cash flow for day-to-day operations.
When you lease, you will pay in small instalments, which helps with cash flow, in some circumstances you may even end up owning what you lease. Lease payments are also deductible as a business expense, so you can write them off on your taxes.
Perform credit checks on customers
If you have customers that aren’t able to pay you in cash, it could be worth your while to run a credit check on them – especially before you sign them up. If they have a bad credit score then you can make a much better, informed decision of how to proceed.
It’s worth remembering that the entire world pretty much revolves around borrowing and lending so, some people have great credit ratings yet choose to finance for a list of reasons. As much as you want to close the deal, late payments will affect your company’s cash flow. If you decide to go ahead with a transaction while having bad credit, make sure you set it up with a clause to protect yourself and your business.
Create an electronic payment system.
You can put off paying a bill until the morning of the due date if you pay electronically. As a result of this time purchase, your cash flow will improve. You can also use a business credit card, since some of them
come with a grace period of many days, which can assist you greatly to improve your cash flow. You might be able to get part of your money back. Don’t, however, get into too much debt.