Getting a handle on cash flow can be tough for small business owners, but it’s a must for keeping your company humming along (and for ensuring that you can sleep at night). So whether you’re just getting started or you’re looking for ways to run your business more efficiently, here are some suggestions to help you tackle cash flow.
1. Keep track of it.
First of all, do you have a firm grasp on how much money is coming in and going out each month? If your business is not yet profitable, do you know when you’ll break even? If you don’t, you’ll want to figure it out, because solid cash flow analysis is the first step to determining where you are and what you need to change or improve.
Not sure where to start? There’s an app for that. Square can be set up to sync with Intuit QuickBooks, which automatically tracks sales and expenses plus a whole lot more. In fact, Square works seamlessly with lots of apps, all of which will help maximize your business insights.
2. Use online invoicing.
If you haven’t already implemented online invoicing, you’re missing out on an opportunity to easily streamline and track your billing system. Paper invoices are hard to keep track of on both ends, and it’s too easy for them to get “lost in the mail.” Square Invoices allows you to send invoices and see who has (and hasn’t) paid yet, so you know exactly where to follow up. Invoices paid online are transferred directly into your bank account in one to two business days. You can also easily record payments made with cash or a check.
3. Incentivize early payment.
Set clear terms, which could mean anything from setting a due date two weeks from the invoice date to requiring payment by the 15th of every month for ongoing services. Then try offering a slight discount, like 2% off, for early payment. Or you can reward early payment with a discount on future products or services. By the same token, you could penalize delinquent payments with either a one-time late fee or another percentage-based pricing structure.
4. Generate some new business.
One of the best ways to improve your cash flow is, of course, to make more sales. There are many ways to do this that aren’t complicated or time consuming. You can go the gift card on them every year. You can also set up an online store, so people can buy your products or services anytime, anywhere. Or you can set up a seasonal marketing campaign. Take note of what works, what doesn’t work and keep an eye on Town Square for new tactics to boost sales.