One of the biggest struggles we see for business owners is cashflow.
Cashflow can be a bit of a tough one to get your head around… you know you’re making money, you know you have paying customers, you know you’re not spending beyond your means … and yet, suddenly there’s a bill (or tax!) to pay and you’ve just not got the money in the bank – how has this happened?!
The answer to this is that you’ve got a cashflow problem.
Many of your purchases have to be paid for upfront … but what about people paying you? The invoices might be getting paid, but if they’re not being paid quickly, then you could find money going out a lot more often that you’ve got the money coming in.
So, here are 5 things you can do TODAY to get that money in the bank a bit quicker…
1. Give more payment options
Let’s be honest – a lot of us can be pretty lazy and we are pro procrastinators!
Seeing an invoice come in, where you know you’ll have to go into your banking app, set up a new payee, add all the details, double check it all, submit, do 2-factor authentication etc etc … honestly we may just put it aside for another day.
Offering other, maybe quicker ways to pay, such as GoCardless, Stripe, Square etc could mean less steps in the process for the client, and therefore a lot less chance of procrastination!
2. Give delayed payment options
It could be that your client doesn’t have the cash in the bank themselves to make the payment to you right now.
An option such as Klarna, to spread the cost, could mean that the cash will come into your bank slowly and steadily.
Or, for business-to-business transactions, check out Iwoca pay. Iwoca will pay you the full amount up front, and then they will be the ones to collect payment from your client.
3. Encourage Direct Debits
How often do you log into your banking and see (maybe scarily!) that payments have been merrily coming out in the background, and you don’t even know about it!
That’s the beauty of a Direct Debit!
If you have recurring clients, then encouraging them to set up a Direct Debit will take the admin off of their plate.
4. Professionalise your invoices
We may not like to admit it, but we are all impressed by, and attracted to, things that look pretty!
Take some time to revamp your invoices – add your own logo, font & colour scheme, fill out the page in an eye-pleasing way – and you may be surprised at how this added dash of professionalism improves the way clients view you.
5. Set up auto-chasing
The last thing you need is an added admin burden, but your slow paying clients need chasing! Certain softwares will allow you to set up automatic payment reminders, and chasing emails that you can personalise.
So, your clients are getting the nudges, but it’s not an extra thing on your plate.
None of these things are time-consuming to set up, but could see you save yourself a lot of time fretting over your cashflow and bank balance.
Invoicing through Xero (our number 1 recommendation for accounting software!) will allow you to easily put these tips into practice.
If you’d like to find out more about Xero, and why we work with this software, see our blog here.
And if you’d like an accountant in your corner to help you feel more confident about your cashflow and your business, then enquire with us today by filling in our Quick Questionnaire.
