As a business owner, one of the most important metrics of success is having a positive cash flow, which will determine if your business succeeds or fails. There are two different ways you can improve your business's cash flow.
#1 Increase Payments on Invoices
To bring in money, you need your customers to pay their invoices. If customers do not pay their invoices, you are not going to have the cash flow you need for your own business to succeed.
To increase your payments, you need to develop a deeper relationship with your customers. You need to help your customers see the value of you not just as a vendor but as a person.
Connecting with customers can make it easier to collect money from them. When your customers feel like you care about their needs and pay attention to their concerns and help them out, they are going to be more invested in your success, and thus paying their bills. Improved customer service can help you increase the number of invoices that are paid on time.
Beyond that, make sure you have a predictable process for billing customers. You need to send out invoices on a particular day of the week or after a set period of time after an order is placed. Then, send out a reminder a week before the payment is due, and send out a different reminder notice on the day of the payment.
After that, have an established process for calling and asking for payment if the payment is not made within a week. Having an established system will make your interactions with customers more predictable, and customers will know what to expect from you.
#2 Increase the Turnover of Your Inventory
Next, you can increase your cash flow by looking at how to increase the turnover of your inventory. Look and examine the clients you already have a relationship with.
Can you up-sell them higher quality items or increase the number of orders they make each month? Examine what can you do to help your clients expand their business, and thus expand your business. Improving existing customer orders are often the key to success for small businesses.
Next, you should always be working to actively bring in new customers. When bringing in new customers, work on selling these customers on items that provide your business with the greatest degree of profit.
Helping existing customers and bringing in new customers and signing them up with higher paying products are two ways to increase the turnover of your inventory and increase your cash flow.
Sit down and talk to your accountant or a small business CPA about how your cash flow looks overall. If you have good cash flow, you can survive not making a lot of profit. Having the cash to keep your business afloat is often more important to the long-term success of your business than just making a little extra money.Share