10 simple ways to develop positive cash flow - part two

Healthy cash flow is essential in maintaining the life cycle of your business. The way your business makes and receives payments can be a vital cog in defining the state of your cash flow.

Last time we looked at some simple and useful tips that you can incorporate to help improve the state of your cash flow. Here are another five recommendatinos from Startup Nation on how to stay on the positive side of the cash flow equation.

6. Simplify your invoices

Generally speaking your customers will have their own set of payments to make. It's important your customers are aware of their obligation to you, but if your invoices are unclear or inaccurate you may slip down in their list of priorities. 

Make sure all details on the invoice are clear, especially the most important ones; like amount owing and due date. One way to ensure this is by creating a template that you can print and alter based on the information of each purchase.

Printed invoices are more clear and professional and as a result are more likely to get paid. Your invoices can impact your payments, it's important they meet ATO requirements and your customer can easily read it.

7. Offer discount for overdue receivables

This is a handy way to bring some cash in, but should only be used as a last alternative after you have phoned requesting full payment.

It's best to set a short deadline for discounted payments and reiterate that the discounted period will end by a certain date.Long deadlines can be taken for granted by customers and they may see it as an indication that the money isn't overly important to you.

8. Send invoices ASAP!

When you invoice your customers it's important you do it as quickly as possible so they remember what the money they owe is for. The quicker you get your invoice out the quicker your customers have to make it one of their priorities.

Most customers are on email now, so why not see if you can send them their invoices as a PDF file and avoid the unnecessary delays that come with postage?

9. Cut unnecessary expenses

Despite all your efforts, you may find that sometimes it's too difficult to accelerate positive cash flow in your business and you need other ways to stay on top of the cash flow equation. One such way to do so is by cutting out any unnecessary expenses you may not need for that month. Slowing the negative cash flow won't always be ideal but in some cases it is a necessary sacrifice, especially if you have a slow month and have obligations due to be paid.

10. Set up  a commercial credit line

A line of credit is a flexible option that acts similar to an overdraft as it can be called upon as the need arises. The best thing to do is set up a line of credit when your cash flow is in a healthy state. The major benefit of this is that you have the service readily available to you and can subsequently tap into the line as the need for some extra assistance arises.

If you want more information on a line of credit check out our article highlighting types of credit available to you.
Ultimately, you don't have to be a financial expert to make positive changes that can benefit your company's cash flow.

Generating a healthy cash flow can be challenging, but following these simple steps suggested from Startup Nationis a great place to start.

Want more information? Dun and Bradstreet - Business payment times indicate poor financial health

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