Getting a handle on your 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 are looking for ways to run your business more efficiently, here are some ideas for tackling your cash flow issues.
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1. Keep track of your cash flow.
First of all, do you have a firm grasp on how much money is coming in and going out each month? If you don’t, figure it out, because that’s your starting point to determine where you are and what you need to change or improve. Also, if your business is not yet profitable, determine when you will break even and use that number for future cash flow projections.
Another troubling thing about cash flow: the cumbersome process of separating business and personal expenses. Square now offers a business debit card so business owners can have real-time access to their funds as soon as they make a sale. Business and personal transaction labels in your Square app make it easy to keep your business expenses separate from personal expenses. Using your Square Card is quick, easy, and makes it free to access your funds
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, ahem, “lost in the mail.”
Square Invoices allows you to send invoices and see who has (and hasn’t) paid, so you know who to follow up with. Invoices paid online are transferred directly into your bank account in one to two business days. You can also record invoices that are paid with cash or a check.
3. Set up instant transfer.
Another quick and easy way to deposit and access funds is with Square instant transfer. As the name implies, you can transfer your funds instantly, even late at night or on the weekend. Just link your debit card and tap instant transfer in your Square app settings to see the funds in your account in seconds. Each transfer costs exactly 1% of the total transfer amount. That’s it. You can choose to use instant transfer any time your balance is greater than $50.
4. Incentivize early payment.
You should set clear terms, which could mean anything from setting a due date two weeks from the invoice date or, for ongoing services, requiring payment by the 15th of every month. Then, if payment is due in two weeks and a client pays you in five days, try offering a slight discount, like 2% off. Or you can reward early payment with a discount on future products or services. By the same token, you should penalize delinquent payments with either a one-time late fee or another percentage-based pricing structure.
5. Generate some new business.
One of the best ways to improve your cash flow is, of course, to make more sales. And launching an email marketing campaign doesn’t have to be complicated and time consuming. Square’s email marketing service allow you to quickly send messages tailored to specific groups, like regular customers or people who haven’t shopped in six weeks.
Let them know about sales or new merchandise, and depending on the group, you can also offer special discounts or gifts with purchase. No matter what you’re offering, email marketing is a simple way to boost online business or get more people in your store.