How To Increase Cash Flow For Your Business

You need cash to carry out important business expenditures and other important activities. In fact, every business is run on cash. This is why your business may not exist for long if you begin to witness cash flow problems.

The problem is competition. Vendors and service providers over pamper clients just for continued patronage. For instance, what is the sense in giving a client a 30 day payment term when he can do an electronic money transfer? You are offering better terms of service at the detriment of your business. You can only make the projected profit if you have enough cash to execute the business.

Here are a few tips to increase your cash flow.

Don’t delay invoice

You sometimes initiate the delayed payment by not sending an invoice when the job is completed. What exactly is your company trying to prove by holding on to invoice when you have rendered a service or supplied a product? Aren’t you in the business because of the money? You make it even easier for clients to pay by sending an invoice when the job is still fresh.

Give discount to early payment

Another smart way to make your clients pay early is to give a good discount to those that pay within 72 hours. You will be amazed at how much they will respond. The reason you are being patronized is because you offer good services or products at competitive prices not because you offer longer payment terms.

Get a line of credit

Putting a line of credit in place helps you cover emergency expenditures. This is much better than getting a loan. You can take some money from your line of credit whenever you need it. Besides, you only pay interest on the amount you borrowed. This is a good way to increase the cash flow of your business.

Open a high interest savings account

You earn a daily interest on your money and you can easily withdraw a part of it to carry out some expenses. This should also ensure cash flow for your business

Think of long term financing

It pays to take a loan for the purchase of a piece of equipment even if you can buy it with cash. This will help you free some cash for business. You should be able to carry out some business transactions that will bring in more profit than the interest on the loan.

Don’t pay client’s bill

Sometimes a third party service provider may need to provide certain service for a client before you render yours. You may feel it is a good idea to pay the third party service provider to facilitate his service and you receive both payments later. This is bad for cash flow. Don’t bear your clients’ cost for any reason.

In conclusion, there is no how you can increase your cash flow without changing your payment terms. It may take a while, your clients will get used to it later. No client is doing you a favor patronizing you. It is because you have what they want.

Visit our website www.LNTGLOBAL.com for our most comprehensive database of business for sale. Our services include: business valuation, buy business, sell business, takeover, franchise business and business consultation. Talk to us today about your needs, your trusted Singapore business broker. Call us today at +65 63569138 or Whatapp/SMS/Wechat us at +65 98555 850. LNT Global Singapore.

Our office is located at Block 52 Chin Swee Road #03-29 Singapore 160052. LNT Global Pte Ltd.