There’s the adage ‘Turnover is Vanity, Profit is Sanity, but Cash is King’. Making a profit is important for success but it doesn’t guarantee you will have enough money when you need it. Cash flow is the lifeline of a business and not keeping in control of it is one of the top reasons small businesses don’t survive.
Managing cash flow can be tough, especially with irregular bills and late customer payments. The financial stress of juggling expenses can be overwhelming. Many small business owners face common struggles – worrying about paying employees, unexpected bills, rising costs, or delaying their own pay to keep things running. Late payments from customers can trigger a domino effect, leading to missed investment opportunities, extra bank charges and constant financial pressure.
Not knowing exactly how much money you need or feeling overwhelmed just thinking about your finances can be a major challenge, but the good news is that there are practical steps you can take to regain control of your cash flow and hopefully sleep better at night.
1. Implement a Clear Invoicing Process
Send invoices promptly and set up automated reminders to ensure clients pay on time. Clear and timely invoicing reduces delays and keeps cash flowing smoothly.
2. Adjust your payment terms
Clearly outline when and how customers should pay. If possible, shorten payment terms and request upfront deposits for larger projects to improve cash flow.
3. Charge your worth
Many small businesses underprice their products or services. Regularly reviewing and adjusting your prices ensures you’re not only covering costs but also charging your worth and maintaining profitability, which in turn will improve your cash flow.
4. Review Your Costs
Track your expenses regularly and eliminate unnecessary costs. Cutting non-essential spending frees up cash for critical business needs.
5. Negotiate Better Supplier Credit Terms
Make full use of supplier credit terms and try to negotiate better payment terms to keep cash in your business for longer.
Taking control of your cash flow doesn’t have to be complicated. By implementing these simple steps, you can reduce financial stress, improve your business’s stability, and focus on growth. If you need support, consider working with a bookkeeper who can help you budget, forecast, and gain better visibility into your finances.
To find out more about how Beeline Bookkeeping could support you with your business, please feel free to contact Nicky for a chat on 07810433315 or at nickyhagenbeek@gmail.com