The old adage “Cash is King” has rarely been truer. No cash means you are unable to pay your employees, your suppliers and even yourself.
If you have a significant amount tied up in debtors and/or work in progress, rather than in your bank account, there are steps you can take to improve this position.
⦁ Invoice as early as possible ….
as soon as products are ready, or work has been completed.
⦁ Make it easy for the customer to pay…
supply bank details, add a Pay Now button to electronic invoices, put in place direct debit so you can decide when you get paid.
⦁ Regularly follow up outstanding debts…
use automation to chase.
⦁ Encourage early payment…
possibly offering a discount to pay early.
⦁ Ensure there are processes in place to resolve disputes speedily.
⦁ Look at costs and see if any can be reduced or eliminated.
⦁ Increase prices…
whilst you may possibly lose some sales this could increase cashflow.
