It is crucial for a business whether of bigger or smaller level to maintain the cash flow for business sustainability. It is to make sure that the business does not require an external financial help and keep its survival upon its own profit. In the words of Mr Clive Lewis who is head of enterprise at the Institute of Chartered Accountants in England and Wales, “Managing your cash resources and making sure you have enough to meet your needs, such as paying wages, buying supplies and meeting your personal financial requirements, is absolutely critical.”
Following are some tips to get business cash flow:
Keeping a follow up on due payments is very important. A correspondence system should be maintained to keep you connected to customers regularly through e-mails, phone or sending letters.
2. Small invoices
It is likely for the customers to avoid payment of large amounts at once so it is better for business to break down the bills into small invoices where money is stuck for a long period of time, rather than having no payment at all.
3.Work flow leads to cash flow
Instead of piling up the work for the end of week or month, make plans for regular work on payment follow ups. Sending 20 emails or letters a day is way more hectic than sending 3 per day with no pressure of work.
4.Use online correspondence more often
Since almost every other person has access to technology in the form of smart phones or use of internet. Make more correspondence through electronic messages for sending payment alters regularly.
Where normally businesses keep good relations with their customers, it is very important to keep good relations with suppliers as well which can lead towards having negotiation of payment terms.
6.Keep the data record organized
A lot of chaos can be avoided at the end of the month if the data related to due payments is kept organized and ready to be worked on.
7.Get statistics for predictions
Getting some numbers related to cash income and outgoing is very important to make yearly predictions which help a lot in managing and making plans for the next year.
8.Use business card
Using business cards help in keeping the record of expenditures and save a lot of energy to keep manual records.