Good cash flow is the difference between running a successful business and a whole world of pain. Don’t let cash flow woes get you down. We share eight easy-to-implement tips to optimise cash flow for small businesses.
Accounting might not be your idea of a good time. But whether you live for the numbers or run screaming from them, you need to understand them. Having a clear picture of your accounts is key to ensuring consistent cash flow.
Cloud-based accounting software will help you automate some of the more onerous data entry tasks and make it simpler to stay on top of your books.
When your customers pay their invoices late, it can put a real dent in your cash flow. While you can’t control external circumstances that will impact your customers, you can take steps to keep collections to a minimum. These include:
If you do find yourself with a persistently unpaid account, escalate it to a professional collections service rather than just writing it off. You’ve earned the money, so you’re entitled to take steps to ensure you receive it.
As with accounting, cloud-based credit control software can automate your collections efforts.
Rather than buying new hardware, you can usually lease it for cheaper through a hardware as a service (HaaS).
The benefit of using HaaS is that the cost is spread out over the lifetime of the contract, rather than an upfront payment that can seriously dent your cash flow.
Cash flow for small businesses often involves making some tough decisions. One of those is cutting any bloat by streamlining your business.
To identify opportunities for streamlining and bloat cutting, you need to be across your accounts. It may be that a product line or service isn’t performing so you can pivot or cut them to minimise overheads. Or you may find a subscription that you no longer need. Or costs you can negotiate to help you save.
A simple way to save is by switching to Smartpay Zero CostTM EFTPOS and passing merchant fees on to your customers through surcharging. It’s easier to implement – and more commonly accepted by customers – than you might think. Plus, it can save you thousands of dollars each year.
Hiring staff is a balance between getting the support you need while still protecting your cash flow. If you need specialist staff but don’t have the cash flow to support the hiring and onboarding process, look to outsource the position.
There’s no shortage of Australian companies that offer specialist services, such as accounting, HR, marketing or collections. You get the benefit of their expertise and knowledge without the added expense of hiring an employee.
During challenging times, a line of credit, either with your suppliers or a financial institution, can help shore up your cash flow so you stay liquid.
Look at what you have available and keep it in your back pocket. You may not need it. But it may be the thing that gets you through a tricky cash flow period.
Think of a deposit as covering your costs for a project. Those costs may be staff, goods, services or materials. When your customer pays a deposit upfront, you have the cash to cover those costs. That means no out-of-pocket expenses.
When the customer pays the balance on project completion, that’s your profit. This requires a really clear understanding of your costs so you can structure your deposit to cover what you need.
Offering lines of credit to your customers is an excellent way to drum up new business. It can also potentially encourage customers to place larger orders because they don’t have to pay for the entire order upfront.
There’s a caveat here. If you have a customer who persistently pays their invoices late, approach a line of credit with caution. If you proceed, consider cutting the amount of credit you’re offering them or increasing the interest you’re charging.
In times of economic uncertainty, maintaining consistent cash flow in a small business is the best way to keep your business stable. Staying on top of your numbers can really help ensure that your business runs as smoothly as possible.
The team at Smartpay is here to help get rid of one pesky bill. Get in touch so we can talk about how we can give your cash flow a boost with Smartpay Zero Cost™ EFTPOS.
Want to know how surcharging benefits your cash flow?
Get in touch with the team at Smartpay and we’ll give you a rundown of how surcharging can work in your business.
Say Goodbye to EFTPOS Bills or Contact Sales on 1800 574 999
Find out in less than a minute
