Cashflow is vital for your business’s health and can often be a source of stress. To boost your cashflow, consider these 10 straightforward tactics:
Set Clear Terms of Trade
Establish clear Terms of Trade for every project. Define your invoicing procedures, expected payment timeline, and consequences for late or non-payment.
Offer Payment Options
Explore payment options such as upfront discounts, requesting a deposit before commencing work, or providing financing through an external provider.
Invoice promptly in line with your Terms of Trade. Consider assigning invoicing responsibilities to a team member to avoid delays.
Streamline Statement Columns
Simplify your statements with two columns: current and overdue. Eliminate references to 30, 60, or 90 days overdue, which may imply flexible payment terms.
Make payment effortless by sending invoices and statements via email. Include your bank account details on these documents and accept credit card payments.
Daily Payment Monitoring
Implement a cloud-based real-time system to monitor incoming payments regularly.
Dedicated Debtor Manager
Appoint a dedicated person to handle debtor collections, avoiding involvement of business owners or sales staff. Consider outsourcing debtor management to a bookkeeper if needed.
Contact customers promptly after job completion to ensure satisfaction. If payments are overdue, follow up the next day.
Caution with Non-Payers
Refrain from providing further services to customers with overdue payments until their balance is settled.
Outsource Debt Collection
If all else fails, consider outsourcing debt collection services as part of your standard procedure, as outlined in your Terms of Trade.
Remember, a sale is only complete when you’ve delivered the product or service and received payment in your bank account.
Require assistance with your Terms of Trade and debtor management policies? We’re here to help!
“Revenue is vanity, profit is sanity, cash is reality.” – Anonymous”
On 22 November from 12-1pm, Sharp Accounting will be running our Cashflow Management Seminar. This will be held at our offices here in Ballarat. Click here to find out more and register at no cost.