If last year your business struggled with cash flow problems more than once, it might be time to get your finances organized, and put some measures in place to avoid financial problems. From reviewing your productivity, your overtime payments, your property expenses, and the return on investments, you can save a few hundred dollars each month. On top of that, you might change your billing system to suit your needs better in the future. Find out more below.
The first item you need to look at is your regular expenses, such as tax, rent, membership fees, and advertising. Are you still paying for a magazine display ad that hasn’t delivered any customers last year? It is time to cancel it and cut the costs. If you believe that you are paying far too much rent, you should look elsewhere or negotiate a deal with the landlord. Find out how much money you need to make each day to cover your regular expenses, and see if you can still make a profit, or need a massive overhaul.
Sometimes investments can deliver higher productivity and increase your profits. If you are still struggling with an old and outdated packaging machine that is too small to handle your volumes, chances are you are not using your time and capacity the best way. You can apply for a merchant cash advance loan to finance a larger investment, and improve your company’s profitability overnight.
Multiple Sources of Income
You cannot put all your eggs in one basket. If you are only getting paid two or three times a month by customers, it might be time to look out for other options. Get more people on board and set up their payment dates in a way that they suits your budget and payment schedule.
If cash flow is a constant struggle for your business, you might want to focus on residual income, instead of one off payments. Create products or services with monthly billing, so you can get paid a certain amount each month, helping you budget better. Create add-on products and services, such as maintenance or checkups that will increase your regular income and your customer value.
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If you have to regularly wait for your money, it might be necessary to look through your invoicing and payment policies. Stop financing large projects, and start asking for an upfront payment or deposit. Ask customers to agree to a payment plan, instead of getting paid at the end of the project in one lump sum. You might sign up for a cloud accounting and invoicing system that will automatically send out reminder letters to customers who are late with their payments.
You don’t have to juggle your money from one month to the next and miss payments because you are not getting paid on time. Implement the above tips, and improve your cash flow, getting some extra money each month to reinvest in your business and improve your offers presented to customers.