We’d all like healthier-looking cashflow, whether on our business or personal accounts – it means less stressing about overdue payments, and more free funds for spending on purchases and investments.
So how can you help your company’s cashflow to remain as liquid as possible? Well, there are a few easy ways to start off, and they’re not dissimilar from the ways you might look after your personal finances.
As counterintuitive as it might sound, one important way to keep control of your cashflow is to make sure your payments go out on time.
Paying your own bills on time – providing there is enough money in your account – is entirely within your own control, so avoid running up late fees unnecessarily, and you can leave yourself free to chase any debts that are owed to you.
We’ve discussed the importance of a logical invoicing procedure in some detail in previous months, so we’ll gloss over it here – but needless to say, accurate invoices sent to the right recipients are more likely to be paid without a problem.
And if you send a clear and accurate invoice to the right place and it still does not get paid on time, consider carefully your next course of action.
For trusted clients who you know have just made a mistake, it’s totally fine to be lenient on deadlines; however, for those with no clear excuse, prompt debt collection action gives you the best possible chance of getting the funds into your account as soon as possible, and maintaining the health of your cashflow.