During a pandemic cash flow management is critical and is the key to your success and longevity as a business. As they say, “cash is king”, but during this recent COVID-19 pandemic, many businesses have experienced testing times. Late payments have become commonplace and cash is often in short supply. So here are some vital tips to help strengthen the cash flow of your business during these testing times.
1. Invoicing and Following Up
The sooner you send a precise invoice, the sooner you’re likely to get paid. In this unstable economic environment, your invoice process and its follow up is incredibly important. Many people will not pay on time, so ask your customers to confirm receipt of invoices, and don’t be afraid to chase them until they have done so. The power of credit control software can also be leveraged. It works to effectively automate chasing invoices from your customers. And can also provide advanced insights, using artificial intelligence and machine learning. Credit control software and debt collection software can provide your business with more control, flexibility and greater returns.
2. Streamlime
Streamlining your business is another solid way to strengthen cash flow during a pandemic. If you can innovate and find ways to make your business more efficient, you will save money. Look at your staff, their roles, and their cost to your organisation. The old adage “time is money” has never been more true. If you’re trying to cut business expenses, look at your labour costs. Can you harness the power of automation? (Automation is defined as the process of automatically producing goods through the use of robots, control systems and software with a minimal direct human operation. It reduces costs and can have a huge impact on your businesses productivity). Debt collection software platforms can automate the entire debt collection cycle for you, without the need for expensive labour costs. Automation is streamlining.
3. Spread Out Your Expenses
Running a business is expensive, particularly during a pandemic. Making your payments on the same day each month might be the easiest approach logistically but it’s not necessarily a positive choice when it comes to cash flow. Use the digital banking capabilities on offer at your bank, and leverage the power of software to track your cash flow each month.
4. Reduce Your Cash Outflow
If possible look to fix your business capital equipment, rather than simply replacing it. Once you’ve navigated the stormy seas of COVID-19 you can look to invest in brand new equipment, but for now consider buying reconditioned equipment if it meets your needs. And also don’t be afraid to barter whenever you’re buying items for your business.
5. Saving for a Rainy Day
Just because you’re in the midst of a pandemic doesn’t mean you shouldn’t be sensible. Your business still requires a stash of emergency cash in case times become even tougher. Applying for a business credit card is a good option for some; it will boost your source of emergency funds if it’s required.