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Tips to Help Cash Flow Better in Your Small Business

February 8, 2016

Inspiration and Wisdom for Small Business Owners and Woman Entrepreneurs

cashflow

The flow of revenue for a small business is a make or break situation much like the necessity for the flow of water in drought infested regions of the United States. Sometimes the heavens open up and water falls easily and abundantly doing its job to moisten the land, fill the rivers and supply the world with water. Other times no rain or snow pack arrive to provide the water levels needed to survive.

Sometimes trying to collect on receivables in a small business can feel the same way as water flow. Most times clients pay on time and the flow of cash is steady and plentiful; but other times for unknown reasons reliable customers stop paying on time which causes a drought of different sorts for small business owners.
Here are three tips about the most challenging aspects of cash flow – invoicing – to help you if you face this issue as a small business owner:

* Invoicing isn’t always straightforward. The basics are simple if you have an invoicing system in place, but other commitments and interruptions can sometimes get in the way. It is essential to get invoices out on time when you are busy. This is a common problem small business owners and especially solo-entrepreneurs face. When your business is thriving and you are busy working to make money, it can be hard to stop and take time to send invoices. It is essential for a healthy cash flow to make invoicing a regular part of your work week.

* Following up on overdue invoices is essential for getting them paid. Although time is always at a premium in a busy small business, you have to commit to following up on outstanding invoices once a week. Sometimes it might take 3 to 5 pieces of communication before someone pays an invoice. Use both phone and email communication alternatively until you are paid.

* If your customers ask for more time to pay their bill, ask them to commit to paying 50% today and give them another 2 weeks to pay the other 50% if you can wait that long. You might have to do this if you are working with loyal customers. Make sure if you give them more time to pay the second half of the bill you automatically followup with them when the second payment is due.

Invoicing is just one part of business that isn’t always a top priority for a solo entrepreneur but since cash flow is the life blood of a business, invoicing and collection of revenue is vital for corporate success.

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