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Julie Tucker
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5 cash flow tips for small businesses

All businesses need a healthy cash flow to thrive, but it’s particularly important for the smallest firms that have to deal with a very narrow margin between success and failure.

This can be a challenge for small and medium-sized enterprises, with many admitting to experiencing problems with their cash flow. Small business owners sometimes find themselves unable to pay debts because of cash flow issues, while some have struggled to pay employees.

Given just how serious these challenges can be, all firms should be taking a proactive approach to managing their cash flow. Here are five steps that could help your company achieve its goals on this front…

Invest in thorough client credit checks

Your business might be keen to bring in as many clients as possible, but don’t rush into any contracts without conducting thorough credit evaluations first. These checks will help you gain assurance that your clients are able to pay for your services and have a good track record for keeping up with their payment commitments.

Be efficient with invoicing

You can’t expect clients to pay you promptly if you don’t send out invoices when you are supposed to. Make sure all invoices are sent out as quickly as possible and state clearly when you expect to be paid.

Consider leasing

Leasing vital pieces of equipment and supplies for your business essentially means you are hiring them to use over a defined period, rather than buying them outright. While this will be more expensive in the long run, it allows you to free up cash that would otherwise be tied up in expensive purchases.

Use modern payment options

The range of electronic payment options available to businesses today can be particularly beneficial because they allow you to wait until the actual day a bill is due before making the payment. This offers valuable flexibility and control over your finances.

Negotiate with suppliers

Cash flow isn’t just about the revenue you have coming in from clients. By negotiating with your suppliers and building up strong, positive relationships with them, you can secure discounts and potentially save money by committing to long-term arrangements.

 

 

Image courtesy of: PublicDomainPictures from Pixabay.

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