6 smart tips to manage cash flow

1Leverage technology to manage data

Paper-based data requires manual time and effort. Let technology do the heavy lifting. Moving to cloud-based platforms can help you to access cash flow forecasting tools that provide quick snapshots of your inventory and financials. And this information can help you to spot trends that could help you to increase sales or savings.

With a cloud-based platform, you can access business data and information from anywhere. So it’s easy to manage your business on the go. And it facilitates collaboration across multiple locations.

2Get personal

Small businesses have the advantage of being able to offer hands-on, personal service. This can help to strengthen your cash flow. When a client misses a payment, pick up the phone.

Calling customers directly about payment can be more effective than impersonal emails. Often, a single friendly conversation is all it takes to solve a problem. And it’s harder for someone to ignore a payment reminder delivered over the phone.

3Revisit your payment terms

It’s always worth reviewing your payment terms. And they may vary according to customer, supplier, and circumstance. Can you accept payment upfront? Or receive a 50% down payment ahead of delivery? Find out what the standard is for your industry. Then, consider things like the payee’s history, the invoice size, and the job itself.

4Be bold enough to barter

Don’t be afraid to ask suppliers and wholesalers for a better deal. Try deferring the whole or part of a payment. Or extending a due date to give yourself some leeway.

5Send invoices promptly

Late payments cost UK small- and medium-sized businesses tens of thousands of pounds per year, and millions of hours of lost productivity.¹ But there’s no point complaining if you drag your feet about sending invoices. Or even worse, if you don’t send them at all.

Make it easy for customers to pay. Invoice on time and offer a range of payment options. Online invoices can make it convenient to pay. In fact, 77% of paid PayPal invoices are paid within a day of sending the invoice.² Consider adding penalties for late payments. Or offer discounts for early ones.

Fast payment systems, integrated with efficient payment solutions, can also save time and give your business the necessary cash flow to power growth.

6Operate more intelligently

Deciding when to hold a sale? Want to invest in new equipment? To effectively make strategic decisions like these, it’s helpful to understand how your business ebbs and flows.

It’s important that you accrue cash when business is booming. But equalising spending is also important. Just because a few big clients all pay in a single month doesn’t mean that it’s time to go on a spending spree. Track expenses over a 3-month period to see where your outgoings are and average them out.

There are plenty of financial tools that can help you to manage and increase your cash flow and scale your business. PayPal Working Capital³ is one of them.