Cashflow is crucial to the growth and survival of your business so it’s important to make sure you have the cash in your hands when you need it.
For most small to medium sized businesses it’s all about managing the basics and making sure the money is coming in as soon as possible after the sale.
Two areas where cash can get caught up are in stock and receivables. Managing your stock or inventory is very important and is something you can easily do in-house to increase cashflow to your business. Managing your debtors requires a different set of skills but once learnt and applied will help you with a more efficient payment system and funds coming into the business in a more timely fashion.
There are several great ways you can manage your debtors more efficiently and receive the cash you need earlier to help grow your business. Recent studies indicate that it takes the average business in Australia around two months to pay its Bills*. This is an awfully long time for business to be waiting for the necessary funds they need to operate effectively, especially in a fast-paced business environment.
Same Day Invoicing
Make sure you send your invoices on the same day the sale is made, at an absolute minimum once a week. If your terms are 30 days, this could mean the difference between being paid in 30 days and having to wait 60 days.
Being proactive and having a good communicative relationship with the businesses you deal with is important. Get to know the people who pay the bills.
Easy Payment System
Make the payment process to your business as easy and efficient as possible for the people you deal with. Take advantage of technology and create a smooth system.
Solid Payment Policy
Keep the lines of communication open and establish a solid payment policy and follow it through. If a customer doesn’t pay on time, talk to them directly in a friendly and polite manner.
At AddCash we believe common sense makes good sense when it comes to growing your business. Contact us today to find out how AddCash Invoice Finance can assist your business.
*Dun & Bradstreet – Trade Payments Analysis