It can often be tempting to spend more time focusing on what’s coming in than what’s coming out. After all, it’s a lot more gratifying. But in business, limiting your cash outflow can just as important as bringing in more cash inflow. Here are some ways to enhance your business cash flow that strike the perfect balance between the two.
1Use software to track finances
There once was a time where all business incomings and outgoings needed to be tracked manually in a logbook or a spreadsheet. Today, however, business owners are spoilt for choice with the sheer breadth and depth of accounting software options which automate many of the jobs that were once both laborious and easy to lose track of. Invoicing and accounting software is affordable and easy to get to grips with and should be used by all businesses regardless of size.
2Encourage prompt payments
This can mean everything from ensuring invoices are always sent as early as possible and sending out reminders when they are not paid promptly to offering a wider variety of payment options for customers and clients.
3Opt for an invoice finance solution
Opting for invoice financing and borrowing against money due from your customers can provide you with the financial support you need to enhance cash flow. You can use the funds to invest in your business (see below) or to clear any debts that might be holding you back.
4Invest in your own business
If you invest in promoting your business and giving it the best chance to succeed with skilled staff, you are more likely to reap greater rewards. Any investments in your business, whether they are in marketing or expansion, will lead to a more positive cash flow.
5Check your inventory
Your inventory is always going to be one of your most significant business expenses but if you have too much inventory that’s sitting gathering dust then it couple be having a negative impact on your cash flow. Check what products are selling well and which are not and change your purchasing habits accordingly. If you have inventory that has been sitting there for months, meanwhile, consider liquidating it as it’s better to have a little money coming in from it than no money at all.
6Revaluate your marketing strategy
It can be easy to lapse into the same old routine when it comes to marketing. But with the modern affordability and convenience of social media, marketing has never been more flexible. If your cash flow is looking more outwards than inwards, maybe it’s not how you’re running your business that;’s the problem but how you’re marketing it to the world? It’s certainly one avenue to explore.