Mastering Cash Flow Management

One of the easiest ways to improve your cash flow is by ensuring you send invoices promptly when they are due. If you delay sending an invoice for even a week, that’s a week you won’t be paid! For recurring invoices, consider setting up automated billing systems to save time and avoid the hassle of creating invoices each month. If some clients consistently pay late, try offering incentives like a 1-5% discount for early payment. This could encourage them to settle their bills faster. Many people are willing to pay quickly if it means saving a few dollars.

Another strategy to improve cash flow is negotiating payment terms with your suppliers. For example, if they currently expect payment within 7 days, try discussing an extension to 14 days. Long-term clients are often in a better position to negotiate these terms. Delaying payments for as long as possible and receiving income as quickly as possible goes a long way in managing your cash flow.

If you’re a business that sells goods it may be worthwhile minimising the stock you hold. Look at which items are selling fast and focus on ensuring you have those on hand.