Cash flow is the movement of money into and out of your business. It comes from a variety of sources and is not just physical cash – it’s all types of payments. When you pay rent, charge a business expense to your company card, receive payment for your products or services – it’s all cash flow.
But as we recover from another recession, many individuals and businesses are looking for ways to increase inflow and decrease outflow. Here are some great ways to improve cash flow for your business this year.
Offer Discounts for Early Payments
One of the easiest ways to improve cash flow is to offer incentives for early or bulk payments. We see it all the time – subscribe to a magazine for the whole year and save 20%, pre-order tickets and early-bird pricing entices customers to buy quickly to save a little money, which ultimately puts more revenue in your accounts.
Scale Down Inventory
Inventory is a heavy burden on your business’s cash flow. But if you consistently look for reputable and efficient suppliers, you can get away with stocking less inventory for shorter amounts of time, freeing up some of your cash flow for other expansion or development ventures.
Request Discounts for Early Payments
Your customers love getting a discount for paying early, why not do the same with your suppliers? Forming positive working relationships with suppliers can allow you to negotiate discounts in return for your paying them early. This is a cash flow win-win for you and for the merchants who stock and deliver your inventory.
Pay Close Attention to Accounts Receivable
If you are in the business of extending any type of credit to your customers or clients, it’s important for you to pay close attention to your accounts receivable. Slow-to-pay customers are a drain on your assets, and on your time. You don’t want to have to track down dozens of late payers because you haven’t checked your AR recently.
Offer a Variety of Convenient Payment Methods
Wherever you can, give your customers plenty of choices when it comes to payment methods. Checks, credit cards, cash – you can even offer online payments and electronic check payments. Presenting more payment options will always shorten the amount of time between initial transaction and full payment.
Create New Sales Channels
Ten years ago, Facebook was selling ads that businesses could buy to increase their brand awareness. Now, every major social media site has a shopping section, where businesses of all types and sizes can reach new audiences.
Creating and taking advantage of new sales channels can help improve cash flow for your business very quickly, if you do it right. At the rate that technology changes, it would be wise to take a look at your sales efforts each year and make time to identify new avenues to explore.
Invest in ACH
ACH payments cut down on the processing time for payments moving in and out of your financial accounts. If it’s good enough to deposit millions of federal stimulus payments to Americans in one day, imagine what it could do for your business!
Whether you are processing checks, credit cards, ACH, or recurring payments, ReliaFund’s Electronic Payment Services payment processing platform can help simplify things with our 100% in-house, end-to-end platform that streamlines payments across online and mobile.
Contact us to learn more.