5 Tips On Cash Flow Planning

2022 is nearing its end, and although the post-pandemic world continues to recover, albeit slowly, many small businesses are still struggling to operate successfully. One of the main factors contributing to this struggle is cash flow issues.

Small business owners need to take control and manage their finances, otherwise sustainability and growth will not be achieved. Here are 5 ways to do just that:

1. Invoice factoring

Invoicing factoring is the process of selling your unpaid invoices to a company in exchange for immediate cash. Your debtor invoices are valuable assets, but unless they are converted into cash timeously, they are not contributing to your business success. Funding are necessary lifelines during a low-liquidity period. Don’t wait. Establish a funding facility now and use it when needed. Apply now.

2. Switch clients to longer term contracts

This is a great way to ensure more consistent cash flow. If your business sells a product or service that is bought or used often, consider selling it as a recurring contract to clients instead of charging customers each time they buy or use the product. Here the customer also benefits with regard to more predictable pricing.

3. Streamline your credit control process

As a small business owner, you should always focus on ensuring that your debtors pay on time. The quicker you send invoices out, the faster the cash comes in. Introduce discounts for those that pay on time and introduce payment penalties to those that don’t.

5. Reduce costs

The age of remote working has opened many avenues to cut back on operating costs, whether that is reducing travelling expenses or reducing your office space. Evaluate your whole business and streamline your business processes. Focus on cutting time, not just costs.

6. If you snooze, you lose

Speed up your service delivery. In the modern age and at the speed technology is progressing, working as fast and efficiently as possible is paramount. Always look for ways to get your product to the customer as fast as possible. Another good tip is selling older and obsolete equipment and replacing it with modern, online and cloud-based solutions. Adapting is key!

Flex Capital offers Invoice Factoring and Purchase Order Funding solutions that inject cash flow into your business so you can implement the changes you need to keep doing good business.