Negotiate quick payment terms from customers
- After making a sale, negotiate payment deadlines and terms with your clients.
- Consider requiring upfront deposits, instalment plans or % discount for early payment
- Offer multiple ways to pay credit card, laybuy, afterpay/zip etc.
- Send reminders and take action promptly if a client is late on payment.
- Use invoice management and accounting software to streamline the process.
Provide incentives and charge penalties
- Encourage early payments by offering discounts and incentives.
- Conversely, consider charging penalties for late payments. Possibly even engage debt collectors if need be.
- These incentives and penalties can motivate clients to pay invoices promptly.
Check your accounts payable terms
- Review your payment terms regularly with suppliers and vendors.
- Optimise payment schedules to align with your cash flow cycle.
- Negotiate favourable terms whenever possible.
Cut unnecessary spending
- Regularly assess your expenses.
- Identify non-essential costs and eliminate or reduce them.
- Prioritise spending on critical business needs and revenue generating expenses.
Lease vs buying
- Leasing equipment or assets can free up cash.
- Evaluate whether leasing makes more financial sense than outright purchasing.
- Their are pros and cons for each.
Maintain a cashflow forecast
- Create a projection of future cash inflows and outflows.
- Anticipate seasonal variations and plan accordingly.
- Adjust your strategies based on changing circumstances.
- Constantly update any forecasts, with the use of reporting software making this much easier.
Study your cash flow patterns
- Analyse data to understand cash flow trends
- Identify peak and low cash flow periods, to better predict shortfalls.
- Use these insight to make informed decisions
