Do you ever look at your bank account and only have just enough money to pay your wages each week?
Are your suppliers ringing you every day asking you to pay their bills?
We all know how stressful this can be. Some of our clients have been struggling with this also, and we’ve been working with them to make changes in their business to get their cash flow back in the game.
By making simple changes to the way you operate your business you will see the benefits in your bank account.
We’ve broken down these tips so you can start to implement them yourself.
Customers…
– Check in regularly for them to make payments. Businesses who contact their customers regularly are the ones to get paid first. Make this a point of call once a week.
– Ensure your accounts are reconciled before contacting customers to ensure they haven’t paid before you call them.
– Set up payment plans for larger bills. Give your customers the same grace you’d like to see from your suppliers, and they will be returning customers for sure!
– Try to opt for payment on delivery, let them know when you book the job that payment will be required on delivery. If you don’t know how much it will cost, you could always offer them the option to a payment plan if the amount is out of their budget.
– Take an EFTPOS machine with you on the job (if applicable). Make it as easy as possible for your customer to pay, otherwise you could have you bank details on a card and they could do the transfer in front of you.
– Consider Offering a discount for early settlement.
– Ensure you create a summary of your up-and-coming workload. Book work in a week in advance so you can project your income.
Suppliers…
– Can you pay smaller amounts regularly? Do you have a large amount of bills due for one supplier? Contact them and ask if you can make regular payments to bring it down. But don’t forget the new bills coming in, you still need to allocate money to those too.
– Be proactive with your communicate with your suppliers about tough times. If you let them know that money is a little tight but can commit to paying on a future date they are more likely to give you some grace, rather than chasing you to pay the bill and being less lenient.
– Pay weekly amounts to utilities like electricity, telephone and internet. Set up weekly scheduled payments in your bank to them so that the monthly or quarterly bill isn’t so high. Budget wisely.
Bank…
– Put money aside for BAS, PAYG and Super each week.
– Set up different accounts that you can transfer money into each week, so that when your need to pay your BAS, PAYG and Super you have the money ready rather than trying to find it each month or quarter. Maybe it’s not the whole amount but at least you have a portion of it covered.
I hope these tips can help you find more cash flow in your business. I know that implementing these things amid running a business can be overwhelming. So why not just make one change at a time, those little changes can make a big impact in the long run.
If you would like any assistance with any of matters, then please reach out to our friendly team at Focused Books.
