Small and medium-sized businesses face the cash flow crunch. Managing business expenses when payments from clients are irregular can be tricky and annoying. Most small business owners have put across their say on the temporary cash flow problems that affected their ability to pay bills on time. Here’s how one can avoid cash flow crunch and keep the business running.
• Invoicing System
Handling all the invoices yourself will undoubtedly result in missing details, get behind and follow up on the late payment process. An invoicing system like Due helps in creating a template for the invoices, sets up recurring payments and reminders before the due date. Adapting automated invoices for recurring clients can mean regular payments. Reminders to late clients imply that there won’t be month-long gaps between payments. Hence the process will ensure the consistent flow of money.
• Invoice more than once a month
A common trend running in the industry is to do invoice only once at the end of the month for all the clients, here’s the issue. There are no fixed laws of doing the invoice only once a month; therefore it is advisable that invoice as soon as one is done with their client’s work. Reminding people about the invoice throughout the month means that payments will come throughout the month.
• Flexibility is a must
By building flexibility in the business, one can be prepared of all the highs and lows in cash flow. So, companies should save profits, and negotiate a plan during low-sales times. Timely payments on a regular basis can help entrepreneurs to ask for variable payment terms and reduced rates as well. Flexibility with vendors cannot be an option every time but can be flexible with their working capital.
Having an organized structure will make the cash flow process convenient for the businesses. Therefore one must improve their chances of keeping an ample amount of cash with them in time of crisis and adopt the strategies as mentioned above.