Strong cash flow is imperative for the prosperity and growth of any business. If your cash flow is lagging, you need to not only increase income, but also cut costs. Here are some strategies that can help with this.
Try coming up with some methods of increasing sales. For instance, add on new products or services, expand your marketing efforts, and offer discounts, rewards programs, and bundled items.
You may be undercharging your customers. To find out, analyze what your competitors are charging, the costs of inventory and equipment, the labor involved in fulfilling orders, and other factors.
Streamline Your Invoicing
Until you send out invoices to clients, you won’t get paid. To streamline the process, switch to cloud-based accounting software that can significantly speed things up.
Encourage On-Time Payments
To encourage your customers to pay on time, follow up with regular reminders. Offer incentives for early payment and penalties for late payments. If there is still a pay gap, consider invoice factoring to quickly strengthen your cash flow.
To cut costs, focus on your expenses, and cut out any that are not necessary. Look for ways to streamline your business operations. Find out if you can purchase inventory in bulk at reduced rates. If you can’t afford to buy the needed equipment, consider leasing it.
Get Rid of Old Inventory
Unused inventory costs money to store. Instead of allowing it to sit on the shelves and take up space, sell it off to improve your cash flow.
Be Strategic with Vendor Payments
Some vendors offer a discount for early payments, so be sure to pay them on time. Pay other bills as late as you can so that you keep the funds on hand as long as possible.
Open a Cash-Back Credit Card
A cash-back business credit card offers you an easy way to earn extra cash. However, be sure to make regular monthly payments on it so your credit score doesn’t take a hit.
Have Your Savings Earn Interest
You should be regularly putting away savings as a cushion for emergencies. Put this money into a business savings account where it can earn interest.
Apply for a Loan
A short-term loan can help you get through a cash flow crisis. Alternatively, a line of credit allows you to borrow funds in times of need, and you only pay interest on the amount you have borrowed.
For more advice on boosting cash flow, contact Kasher Capital.