Increase Cash Flow by Using These Techniques
Your business will benefit from increased cash flow if you can get your customers to pay quickly. Many companies need help to get their customers to pay soon. The trend of delaying payments began long before the COVID-19 epidemic.
A business can benefit from faster payments and collection in many ways. Some of these benefits include providing the company instant access to cash and higher levels of efficiency.
If you are a business owner and want to improve your cash flow by getting paid quickly, try some of these tactics.
Ensure Your Tech Stack Is Up to Date
New technologies and integrations are helping to make the business world more efficient. They also help with financials and payments.
XERO can help a business improve its cash flow by reducing the time it takes to process payments, tracking invoices, and much more.
Paying in Advance
Collecting advance payments is one way to speed up the payment process. You can do this by requiring a percentage of the invoice amount to be paid upfront or by taking down payment for services or items. This will allow you to access a portion of your funds immediately and help establish if the customer will be reliable in terms of payments.
This method can cause potential customers to become less interested in purchasing from you if you ask for less money or collect it too early. Use the rates other businesses in your field charge upfront to help you set your own. Don't exploit your customers. After the cash has been collected, services must be provided within a reasonable period.
Accept multiple forms of payment
Customers will not do business with you if you only accept cash or certain types of credit cards. Payments are made by most B2B businesses today using credit cards, electronic payments, checks, wire transfers, and money. Restricting payment methods can make it more difficult for customers to pay you.
Keep Accounts Receivables Up-To-Date
Sending invoices as soon as possible is a simple but highly effective way to improve cash flow. Customers who pay their invoices immediately after receiving them are to be rewarded.
A current accounts receivables system will also ensure that open invoices will be secured for long periods. It is essential to have a solid follow-up plan that will help you stay on top of your payments. Outsourcing your accounting services may help you keep up with your AR processes.
Maintain uniform processes and formatting
Invoice formatting should be consistent, clear, and concise. They were automated, too, if you're using XERO. It will be more appealing for your customers to have a consistent time frame and process of how the invoices are sent out and collected.
Cash flow is an essential metric for a business to track in its accounting and decision-making. An outsourced accounting provider can help if you find it challenging to keep track of this information as a business.
Basis 365 removes the burden of developing and managing Accounting, including Bookkeeping, Controller services, AP, AR, and more, by providing an expert team of CPAs and other accounting professionals who understand the unique accounting needs of growing businesses.
