Maintaining positive cash flow is a challenge that most small business owners face, and for some, it’s an ongoing battle. Your business cash flow comes from three different areas. These include financing, investing, and operating activities. If you find yourself in a bind, GM Capital Group presents several ways you can improve your cash flow situation quickly.
Send Detailed Invoices to Customers Right Away
Your customers cannot pay you promptly if you take weeks to send them an invoice. As soon as you make a sale, provide accounts receivable with the information they need so they can send an invoice to the customer electronically or through the mail. Electronic invoices are a much faster option, and you are likely to receive payment sooner as well.
The best way to avoid delays with customers paying invoices or to have them claim they don’t have all the information they need is to be thorough from the start. Each invoice should contain the following information at a minimum:
- Due date listed in bold in two or more places
- Types of payments accepted
- Penalty for late payment
- How to make a payment
You might also want to consider offering customers a small discount for paying early.
Negotiate Discounts with Suppliers
If you have a good payment history with suppliers, don’t be afraid to ask for a volume discount or an early payment discount yourself. Many suppliers will be willing to negotiate, especially if they know the competition might offer a better rate.
Take an Inventory of Your Inventory
Merchandise sitting around that isn’t selling not only takes up valuable space, but it ties up your cash flow as well. Consider putting slow-moving items on clearance or liquidating them to make room in your budget for merchandise that does sell well.
Apply for a Business Loan for a Temporary Boost in Cash Flow
GM Capital Group offers several flexible financing options for small business owners. Please contact us to learn more.