Businessmen who run small business usually worry over their cash flows not being positive even when their sales are running smoothly but somehow there is just not enough cash to make ends meet every month. The only possible cause behind this problem is that your customers are buying stuff from you on credit and they make late payments. But if this is not the case, then take a look at the 4 easy ways for fixing glitches in the cash flows of small businesses.
Don’t Slack When It Comes To Billing Clients
This is especially important if your business operates on credit payments. There is no way you can dilly-dally when it comes to sending out invoices to customers on time. Remember that if you do not send in the invoices immediately when the current month comes to a close, your customers won’t make payments on time which will eventually lead to problems in your cash flow statement. The best way to ensure timely payments from customers every month is to mail the invoice as soon as the job gets completed.
Increasing Prices When Needed
When starting a new business, small business owners have to sell out their products at ridiculously low prices in order to attract customers but by doing this, they barely make any profit. In fact, only the cost of the product is covered in the initial stages of establishing a business. Once you determine that the sales aspect of the business is going strong and customers keep coming in, it is time to increase the price of your product. However, it is important to raise the price gradually so that it does not bring a dry spell for the business in the coming weeks.
Get Hold Of Retainer Clients
Doing business is risky because sales are not guaranteed. There may be times when tons of customers will come barging in and then suddenly there will be days when the business won’t do as well as it should. If you are a lawyer or repair man offering services, you can easily battle the dry spell in doing business by getting hold of retainer clients so that you get fixed monthly payments for the services you render. Getting hold of retainer clients is undoubtedly the best way to tackle irregularities in the cash flows of your business.
Start Accepting Credit Cards
Last but not the least; you can fix your cash flows by accepting credit cards. Even though most small business owners prefer to operate their business on cash only, accepting credit cards is a great way to minimize the risk of receiving late payments. When running a business, it is important to facilitate customers as much as possible since people tend to stick to the businesses that they find convenient and flexible in terms of making payments. With credit cards, you can receive your pending payments within a day or two as compared to 30 days when customers are only asked to pay cash.
If you are having trouble with adjusting and balancing your accounts at the end of the month, contact SK Financial CPA to provide you with CFOs and CPAs on a contract basis to help you with book keeping.