Tips To Improve Your Business Cash Flow

Maintaining a steady flow of cash is absolutely essential to business success; even a profitable business cannot survive without it. But time spent managing money is an unwelcome burden for businesses in a tough economic climate.

Here are some practical and proven suggestions to help improve your business cash flow. Along with a robust approach to cash flow forecasting they can help organisations take control over the lifeblood of business and could cut the pressure on the bank balance.

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Maximising Cash Receipts

Closing the sale is only one step in the process of generating revenue. Getting payment can be a challenge in its own right. Here are some suggestions for boosting the rate at which cash is received from customers:

  • Deposits – where possible take some money up front. This has the added benefit of creating commitment.
  • Prompt payment discounts – offer customers a better price if they are able to pay on delivery, or even better, with the order.
  • Statements – remind customers how much is outstanding on a regular basis.
  • Credit control – have a firm and consistent process in place. Close every call with a commitment from the customer to some sort of action and record it along with the name of the person spoken to.
  • Invoice Finance – even with firm credit control businesses can wait 30, 60 or even 90 days before being paid. Invoice Factoring or Discounting unlocks the cash tied up in sales ledger balances and payment can be received within a day or two of raising the invoice.

Take Control of Payments

Optimising receipts is half of the battle to improve your business cash flow. The other half is keeping an iron grip on payments made.

  • Strict authorisation processes – ensure that money cannot leave the business without being approved by senior staff who have a good understanding of the cash flow situation.
  • Optimise payment terms – do not pay suppliers a day earlier than needed, taking full advantage of the payment terms on offer.
  • Pay HMRC as late a possible – maximise the opportunities delay paying VAT and PAYE for as long as possible. For example, paying VAT by Direct Debit gives allows businesses to keep their cash for a few more days.

How Touch Financial Can Help Improve Cash Flow

A conversation with one of our expert advisors will give you some new ideas about how to improve your business cash flow. We have helped thousands of UK organisations find ways to improve their liquidity, giving them the means to overcome cash flow pressures.

Organisations looking for funds come to us because, as the UK’s leading commercial finance credit broker, we have the knowledge and experience needed to help find the best answers.

We have carefully selected a panel of funders offering solutions to UK businesses. We take the time to understand your needs, allowing us to recommend which approach could work best for you.

Our service is entirely free to you, our customers. That is because we are paid by the funders and our internal structure ensures our advisors offer advice that is completely impartial.

Once we have helped you to find a solution we keep in contact because we believe in the importance of long-term relationships with our customers.

If your organisation needs to find a way to improve its cash flow why not invest a few minutes of your time and give us a call today?

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Every month Touch Financial help businesses improve their cash flow with invoice finance. Request a quote to find out how much extra cash you could raise.

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