How to Improve Cash Flow for Small Businesses
Tapping into the heart of success
To small business owners, it is no surprise that cash flow is one of the make-or-break factors in determining their success. But did you know that almost 2/3 Canadian small businesses have had cash flow problems?
There are a few ways you can address this, so we have compiled a series of strategies for small businesses to improve cash flow. It is critical that small businesses are able to take control of this aspect in order to survive. Let’s jump in and have a look at these strategies and tools that you can use to empower your business and take control of your success.
1) Collect Receivables
Entrepreneurs and small business owners alike depend on the ability to pay their expenses as they come. This makes cash flow imperative, so a great place to start is by taking control of your receivables. To correctly predict them in advance is of course crucial to that endeavour but such is life — things don’t always (or even sometimes tend to) go to plan!
Overdue invoices and bad debt can cause real headaches in this department.
At this point, you may be thinking “Not a very good case for the strategy noted above”. Now, you wouldn’t be wrong, per se. However, if we may introduce a new tool that addresses the biggest challenges in receivables it does change things quite a bit.
This handy tool which Simplypay is launching soon will allow users to collect receivables payments via EFT or credit card. With this in mind, collecting receivables becomes a viable strategy for improving cash flow, but we’re just getting started.
2) Make Large Purchases with a Credit Card
When it comes time to buy that new equipment that is going to help you expand or produce more product or what have you — put it on the card. We don’t inflict threshold limits on our users meaning you can pay your high-value expenses easily. Our service also allows you to use your credit card wherever it isn’t accepted.
This allows you to not only take advantage of early payment discounts but to maximize the value of your credit card in a way that wasn’t possible before.
Whether it’s travel perks, cash back or points, when you use your credit card for large purchases you are able to increase these benefits. Getting in the habit of maximizing value through these practices is a big part of taking control of your cash flow. It all adds up.
3) Pay Bills Electronically
In tandem with maximizing value, you need to tighten up the ship when it comes to unnecessary expenses. What part of the business plan involves paying late fees and penalties? Pay bills electronically and avoid all of that. You can pay bills, payrolls, vendors and suppliers on time and avoid all of that.
When it comes to taking control of your cash flow it is often the summation of a diverse portfolio of small best practices that makes up one effective strategy. As such, when it comes to paying electronically, you should also consider making it a two-way street:
4) Offer Electronic Payments
Don’t wait for cheques from your customers to clear. When you offer your clientele electronic payments it is not only convenient for them, but for you. Get paid instantly — we want the cash to flow, not sit damned up waiting to clear.
Strategizing for improved cash flow doesn’t just mean focusing on saving and making more cash. A strong and diverse strategy also requires focusing on the ‘flow’. Open up your cash pipelines with electronic payments from Simplypay and literally take control of your money!
5) Pay Fewer FX Fees
If you do a lot of business internationally, then those FX fees can really pile up. Not only does our FX service guarantee the best rates, but they are also fast. You can skip the paperwork and know that you are sending money in real-time. When it comes to plugging financial holes, unnecessary expenses like hidden fees and overly high rates need to be eliminated.
Simplypay helps you to make that possible.
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