5 tips for healthy cashflow management

www.peakcashflow.co.uk

FOR HEALTHYCASHFLOW

MANAGEMENT

5 USEFUL TIPS

Many business fail each year because of afailure to manage their cash flow and – morespecifically – problems related to invoicing.

The pressures arising from outstanding invoicescan present even the most organised businesseswith seriously difficult challenges.

But with the correct processes in place, yourbusiness can ensure it is in the best financialposition possible.

KNOW YOURCUSTOMERS

TIP #1

Understanding your customers is crucial inmanaging your cashflow. By understanding whatsort of business they are and their liability, youcan plan your invoicing and credit controlstrategy more accurately.

Most importantly, different customers mighthave different payment practices. Do they pay alltheir invoices on a specific day each month or isit only as-and-when the need arises?

If you build this into your planning, it will makethe entire invoicing and credit control processmuch more straightforward.

AGREECLEAR TERMS

TIP #2

Agreeing clear terms and conditions from theoutset can save valuable time when it comes todealing with invoices and payments later.

If your terms are consistent and your customersunderstand any late payment charges, this willreduce the risk of disputes in the long run.

INVOICE QUICKLY& ACCURATELY

TIP #3

Simple but crucial; make sure that invoices aresent out to schedule and that all information isaccurate. Even small errors can cause delays.

For small businesses, this may mean schedulingyour invoicing at a specific time each week ormonth, and keeping an organised system offiling.

Alternatively, online, cloud-based accountancypackages – such as Xero – can help you withthis process.

SIMPLIFY YOUR CREDIT CONTROL

TIP #4

Implementing a simple credit control processneedn’t be complicated.

The benefit is that it can help to ensure paymentsare made on time.

Setting out a day-to-day strategy can reduce therisk of late and missed payments.

MAKE PAYMENTEASY

TIP #5

Your customers will prefer a simpler and fasterprocess in terms of payment.

The best option is online payment – youdefinitely want to avoid the use of cheques whichcan cause delays.

A further benefit of online payment is that it canhelp create repeat business due to your providinga positive customer experience.

For more useful advice about cashflowmanagement and finance for small businesses,

please visit our website:

www.peakcashflow.co.uk