Cashflows can easily get out of hand and some studies suggest that financial miss-management is one of the top causes of business failure. We gave 4 tips HERE, now here are 3 more tips to help get cashflow under control – remember it is an on-going thing to work on and never stops!
1. Set Credit Terms of Your Invoices Carefully
If you are offering credit to clients/customers, then it is important to set clear limits to your terms of credit. The next step is to –
2. Collect Payments Fast
We must manage debtors. Try letting debtors know how much time remains before due dates. Keep close touch with major debtors as payment deadlines approach. Also consider offering small discounts for early payment as an incentive.
3. Pay Creditors to Your Strategic Advantage
You can take advantage of credit terms and prioritise payments according to the consequences involved if you go overdue. Priorities though, are wages, taxes and direct debits at the top of the list for timely payment; but sometimes key suppliers may be prepared to wait. Don’t pay early just to get a discounted price unless getting the discount is better than being without the cash.
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