5 Ways to improve your cash flow

It’s safe to say that if your business has a healthy cash flow the chances of success are incredibly high. Many businesses fail to see the importance of healthy cash flow and assume that as long as they are making a profit then their business is doing well. Your business can be making a profit but if you’re struggling throughout the month to cover your outgoings then you need to make changes. The majority of businesses who fail in their first 5 years of trading, fail due to poor cash flow. So here’s how you can improve yours.

Review all outgoings

Upon reviewing your outgoings, you may find that you’re paying for subscriptions which you no longer use, you’re not using to their full potential or you have pieces of software which overlap and do the same thing. You may even find that you’re paying for things which are no longer relevant and you didn’t even realise you were still paying the subscription! By auditing your transactions you will be able to cut back on unnecessary expenses.

Review your pricing

Before you started your business you probably did lots of research to find out what the competition was charging and reviewed the market in order to come to a price for your goods and services. However, it’s important to review your pricing each year, especially with the rise in inflation. Many things are now costing more money which means if you’ve not put your prices up to reflect this, you could be losing money.

Also consider, are you charging your worth? It’s natural to charge less than you think you should at first, you’re scared of not attracting clients. But once you’ve got your feet firmly on the ground you will soon start to see that people will pay for your expertise, so don’t underestimate yourself and don’t under charge for your services. Be brave and charge your worth, especially if you’re in high demand.

Keep on top of your bookkeeping

When you’re busy it’s easy to put your admin to one side. But if you don’t keep on top of your bookkeeping, you’ll never really know your true financial situation. If you can’t find the time to do your bookkeeping on a consistent and regular basis then reach out to a bookkeeper just like us. By hiring a bookkeeper you will have a true picture of your finances, enabling you to make important business decisions with accuracy.

A bookkeeper can also use your historic data to create a cash flow forecast. This will give you an insight into the direction your business is heading so that you can make changes for improvement and set new goals for your business.

Send invoices out in good time

The longer you leave it to send out your invoices, the longer it will take for you to get paid. It’s important to have good processes in place when it comes to invoicing your clients. Invoice on set dates and make it easy for people to pay you by including payment links. It’s also advisable to have payment agreements in place. We can help you to automate recurring invoices so you don’t need to worry about getting the invoices out in time.

Chase debt

One of the main reasons businesses have poor cash flow is because clients don’t pay on time. Don’t be afraid to chase payment if it’s not received by the due date. This process can be automated within your accounting software, or if you would prefer a more personal touch we can do the chasing for you, so that you can concentrate on bringing in more new business.

If you need help to improve your cash flow then we’d love to hear from you.