Don’t Bust Your Business: Cash Flow Tips for Small Business Owners

Running a small business can feel a bit like running a small country from time to time. Depending on what kind of company you have and how many employees work for you, you may be spending thousands of dollars each day just to break even.

Dealing with cash flow isn’t really something that you can mess around with though. If you’re new to running a business however, the process of making sure you have enough in your bank account at all times can seem like a major burden.

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Use this guide to learn more about cash flow and how you can keep your business from running out of money in the short term.

Bill Early

When you send a bill to a client or customer that owes you money, setting your terms as early as possible can help you bring in money quickly. Of course, you may not be able to ask your clients to make payment within a week of receiving an invoice. In many businesses, 90 days is standard.

To decrease the amount of time that you need to wait though, you could consider giving a small discount for payments that occur within 30 days. Doing this can help you get cash into your account instead of waiting a full 90 days or more on your money.

For companies paying you, the discount is often worth letting go of their money if it won’t be a financial hardship for them.

Schedule Payments Wisely

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When you need to pay a vendor you should try and make payments as late as possible. For you, getting payment terms close to that 90 days will help you hang onto as much cash as possible.

You may also be able to schedule your payments with trusted vendors after certain times when you receive money from those companies or customers paying you. Doing that will help you stay in the black all the time.

Hire a Factoring Company

Sometimes handling all of the cash coming in and going out can be very tricky for a small business. That’s especially true if you buy and sell a lot of goods or deal with a huge number of clients and vendors.

Hiring a business invoice factoring company can help you have cash all the time so you never run short when you need something.