The top 5 processes your business needs to have in place to maximise its cashflow

 

 

Cash is the lifeblood of a business and yet so many business owners ignore it until it becomes a problem and they can’t pay suppliers or worse their employees. 

 

Often businesses experience cashflow problems because they don’t have the right processes in place to ensure timely collection of cash. 

 

Make sure your business stays healthy by having these top 5 processes in place: 

 

1 – send your invoices in a timely manner. Once the job is complete make sure you raise and send the invoice to your customer. We often see businesses forgetting to raise invoices or sending them weeks after the work was finished. You can’t get paid if you don’t send the invoice, it really is that simple. 

 

2 – send statements and polite reminders. Some customers, particularly large businesses, have a policy of not paying invoices until they are chased. It’s unfair but make sure you send timely statements so you don’t get caught out. 

 

3 – tighten your credit terms. It’s up to you what terms you offer but if you do give as much as 30 days then clarify whether this is from month end or the date of your invoice. If you are often late in sending your invoices you don’t want to give further credit by then offering a further 30 days to pay 

 

4 – use industry leading accounting software like Xero or QuickBooks to automate invoice and payment collection. It makes getting paid quicker and if you link the invoicing systems to a payment app like GoCardless or Stripe you can get it to collect payment automatically for you. 

 

5 – regularly review your expenses, particularly subscriptions. Often a business will pay for something it doesn’t need and it’s easy to focus on sales and let cash leak out of the door by not keeping a close eye on the expenditure.