As the pandemic subsides and you look to grow your business, positive cash flow will be essential.
But if your cash flow could be better, here are moves you can make right now for a healthier bottom line, according to the experts at business financing services provider Nav.com.
Expenses & cash flow
Product inventory and operational goods and services are important. But are you spending more than you need to? To find out, huddle with A/P to:
- break down how much you regularly spend with each of your biggest suppliers, and
- investigate what competing vendors might charge for the same types of products or services.
After that, you should have a good idea of who your team needs to talk to about renegotiating contracts, prices, credit terms, and/or early payment or bulk order discounts. All of these can significantly cut costs and improve cash flow.
It’s also a good idea to enlist your team to scrutinize all areas where money is being spent throughout the company. Give them a date to report back to you on where they think unnecessary spending is happening.
Incoming payments
Something that can also benefit cash flow is adding new and convenient ways for customers and clients to pay, such as online and mobile payments, an auto-pay option, or other electronic payment options.
And if cash still isn’t coming in fast enough, it might be time to review your payment policy:
- Can you offer an incentive for customers to pay on time or early, such as a small discount or a discounted product or service?
- Is it time to revise your penalty or late fee schedule?
- How are you handling past-due clients?
One option for past-due B2B accounts is selling those invoices to a collections agency. Once the company collects, they give you the remaining amount, minus their fees.
When making any payment policy changes, be sure to give your customers notice in writing.