Cash flow is vital for business success and most people are aware of the phrase – Cash is King.
Your business both wants and needs to be paid promptly for work you have done, services or goods provided. There are several steps you can take to improve cash flow in the business.
Do not offer extended credit terms – “the norm is 30 days” – no its not! Make the bills payable immediately on issue.
Issue bills from your mobile device – phone or iPad. Accounting apps enable you to issue these and email them to the customer whilst you are still on site. Get paid there and then too using a mobile app or credit card device. Alternatively, have a Pay Now button on the invoice that the customer can click and pay using their credit or debit card, or if you prefer, by bank transfer straight into your bank account. The latter method can also be free of charges – no more expensive credit card processing fees!
Use direct debit to collect the funds – many people will pay their utility bills, TV licence etc by direct debit – so use it in your business to collect money. Direct debit is preferable to standing orders which never seem to get changed when the prices change! You can be up and running with collecting money by direct debit in a matter of hours! Make it a policy and part of your terms and conditions that all new customers are required to put in place a direct debit.