You can offer your customers an incentive or a discount if they pay their bills ahead of the set due date. The buyer can save money on their purchase, while you can gain funds more quickly, therefore both parties are happy with the outcome.

This may take the form of an email sent out to customers that receive 30 day invoices, stating that they can pay 1-3% less (depending on amount chosen) if they pay within 10 days of receiving the invoice.

You may alternatively want to give them a call so that you can directly reach the person in charge of payments and can ensure the email simply does not get lost.

It is important that you work out your profit margins so you do not eat too much into this before offering a reduction. You will also need to effectively communicate this discount to your customers, so they are motivated to quickly take action.

Your customers might be ready to pay, however, they simply cannot pay until they have received an invoice, so do not delay this task and get it done as soon as possible.

Considering that your terms will often state payment must be made within a certain number of days from the invoice being issued, for every day you are not sending over the invoice, you are adding to the length of time until you might receive payment.

Some brands fail to send invoices until the end of the month, which might not be in your businesses interest if you require a continual cash flow to cover new costs.

As they say, failure to prepare is preparing to fail. You must have a Chart of Accounts (COA), which is a comprehensive list of financial accounts setup, allowing you an overview of where your business is spending and earning money.

This will also prove useful for a book keeper to keep track of incomings and outgoings, detailing expenses, revenue, liabilities, equity and assets.

Before jumping ahead into the day to day tasks, you should spend some time forecasting the money that will be coming in and going out of your business, on a weekly and monthly basis.

This should be set for a 3 month period, however, in the long run, you might want to set this for 6 or 12 months, to offer a greater overview.

By conducting a thorough forecast, you can easily spot periods of time where the net cash balance will be negative, therefore, you can plan around this and conduct some of the recommendations on this list.

The forecasting should be continuously update, as well as adding accurate details of expenses and invoices with your bookkeeping. How often you update your forecast will largely depend on how much you might be relying on a positive state of cash flow to sufficiently run your business.

You need to make it as easy as possible for your customers to pay you quickly. It could be that a simple bank transfer is ideal, or they might want to pay via PayPal, and you may want to have a mobile card machine in place.

One other great option is to have a pay by link message you can send to customers via email, so all they have to do is click through and input their details to promptly make a payment.

If you do not have a pay by link option available, then make sure to check out our merchant panel to allow for pay by link pages, while matching your company’s colours and branding. This could also be handled through a virtual terminal.

We have also seen a growth in QR code payments, taking you straight through to the purchase page after scanning the code with your camera phone.

It is common for businesses to have idle cash sat in the bank, waiting for a rainy day when it will be needed, but given the miniscule interest rates you might be getting from the bank, there are much better ways in which it could earn you extra revenue.

You could invest the money into growing your business, putting the money towards marketing, so you have a greater customer base and an increase in sales, whilst you could also look to placing it in a high interest rate account.

Just the same as you offering discounts for early payments, you could look over your expenses and see whether any of these businesses will offer a discount for early payments, allowing you to pre pay these off.

If you have excess funds available, you could see whether buying a larger quantity of stock could lead to a greater discount per unit. But as always, we would express caution about spending funds unless you are confident that they will not be needed.

We previously highlighted the incentives you could offer in order to achieve an early payment, but on the flip side of this, you can get equally good results by highlighting the punishment for late payments.

If you charge a hefty fee, this might scare people into paying early, in case they forget to pay on time.

This could take the place in the form of an email highlighting that they have ‘X number of days left to pay’ and then covering the costs for late payments.

Remember you cannot add these fees later on, they have to be clearly stated at the point at which the sale is made, so the customer is aware of any late payment fees that will be applied.

Whether it is a company car or equipment for the office, leasing can lower your initial costs, allowing you to spread them out over a number of years, meaning it will be easier on your cashflow.

While leasing means you will not own the asset at the end, for many businesses, initial costs can be unwanted, so by leasing instead of buying, they can ensure they have a healthy cashflow and not waste too many funds, until they have a greater level of revenue to cover these costs.

Whether it is office chairs and desks, printers or folders, many of these can be found second hand at heavily discounted prices, or even for free.

You can find some great deals for office equipment on Gumtree and Facebook Marketplace, with Gumtree even has a ‘freebie’ section.

Business owners often want to buy new stylish equipment when they launch their brand, which is understandable, but your revenue could be used for much more critical purchases elsewhere.  So do not worry about ‘looking the part’ and instead focus expenditure on what will provide you with the greatest return on investment,  such as Pay Per Click (PPC) advertising.

Many companies do not want to increase their prices, as they are worried this increase will put off customers, however, it might be imperative to cover your costs.

You should have a look at the market and work out what others are charging. You might need to increase your profit margin, or maybe you will have to go back to the suppliers to see if you can work out a better deal.

A freelancer might raise their prices for clients by 10%-20% and while they may lose a client, the concept follows that they should still keep most of their clients.  The added income means they earn more per day and they can now look to gain a new client for that extra time available at a higher rate.

The perceived value concept is truly fascinating. By keeping your prices low, you may be creating an image in the buyers’ head of it being a lower value item.

By increasing your prices, the perception of value can completely change. An example of this is with Peleton. They were struggling for sales when charging a lower amount, so they increased their prices by 66% and the sales actually increased.

Not every product you try to sell will be a success. You may have a number of products in a warehouse burning a hole in your wallet, as they cost to be kept, while they are not earning you any money on your initial investment.

It might not be products you are struggling to sell, it could be items where the Use By Date or Best Before Date is getting closer, or it could be items that are now considered outdated.

You could therefore look into ways of selling these off, so you can still turn a profit, or at least get some revenue back so you can reinvest it.  You might want to put a discount on these products on your website, or you may want to create a clearance or special offers page.

Alternatively, you could send an email to your customer base offering them a unique discount on these items, therefore creating the feeling of value to email subscribers, while helping you to push out older items.

To successfully sell off these items, you should do a stocktake or go through your systems to see any products which you are struggling to shift.

Sometimes it does not pay to be efficient. You may want to have a read through the accounts payable terms, which is the terms for payments going out of your business.  It is quite possible you are paying before a payment has to be due, whereas by holding onto the cash till a later point, it could help you to balance the books in the short term.

Also, many vendors are happy to negotiate on the payable terms if you let them know in advance, so you can see whether you can extend the payment terms to prevent a cash shortage.

Over time, the vast majority of businesses will find they have costs for services they no longer need, or not making the most of, or for products they do not use. They may also have costs that are not a top priority when cashflow is tight.

Some examples of these are included below:

• Software – Brands will often sign up to a number of software platforms, for marketing, accounting and many other reasons, which will charge a monthly fee, but if they are not being utilised then it might be time to ditch them.
• Company Incentives – Whether it is monthly music subscriptions or luxurious items, these can help improve employee morale, but at times of tight spending, they might not be the top priority.
• Trade Show Payments – Trade shows might be a great way to increase awareness of your brand, or to help get you in front of buyers, but the costs involved can be hefty and they might not be imperative if you are struggling to balance the books.
• Marketing Costs – Marketing is pivotal for increasing traffic and sales for your business; however, not all efforts are successful. If you are running PPC ads at a profitable margin, or you are investing in Search Engine Optimisation (SEO) to help grow your businesses online presence, then it will most likely be money well spent, However, if you are spending a fortune on social ads without seeing a great return in this investment, then it could be worth cutting back, at least temporarily.

It is commonplace for a customer to not want to cover a cost in cash, especially with the growth of Buy Now Pay Later (BNPL) schemes. But you need to ensure they have the means in which they can cover those monthly costs, so you should always run a credit check on anyone you are providing credit for.

If they have a poor credit rating then this might be someone who will miss payments, therefore messing up your cashflow forecasts and potentially pushing you towards being in a negative position.

You can setup systems and processes in order to make more informed business decisions based on customers’ financial position and history, to help ensure they fulfil their credit commitments.

Great ideas can come from anyone in the team, so it could be worth setting some time aside for the employees to debate different avenues for revenue. It could be ways to upsell products during the sales process, ways in which costs could be cut, or ways to expand into a new market.

You might find that you could highlight a provided service when selling a product, or you could push the sale of other products that work well with the purchased product.

Increasing your customers order value can be even more worthwhile than finding new customers, which is a costly and time consuming.

If you had 1,000 visitors to your website in April and 10 made a purchase, that would mean you had a conversion rate of 1%.

By looking at Conversion Rate Optimisation (CRO), you might find ways in which your website can be improved.  The aim is to increase the number of sales from the same number of visits.  This could be achieved; with a smoother purchasing process, a faster page speed load, less pop-ups, or less steps in the purchasing funnel.

A 1-2% increase in conversion rate could make a significant difference to your cashflow situation. Making these CRO changes will not just increase your sales, but it could also increase your customers lifetime value, being how much, you earn from them, through every purchase they make with your business.

You may also learn more about your customer base and can then improve your website in the future, which will also help to improve the ROI on any PPC ads you are running.

A small business loan from a bank, or a merchant cash advance can help to cover your costs in the short term, so that you do not face any liquidity issues.

Your eligibility is based on your previous card sales history.  Unlike taking a small business loan with a bank, you will not have to secure it against an asset, like your house.

All brands will have peak periods for certain products. For example, if you are in the travel industry, then January is the peak period, often making twice as many sales as any other months, taking bookings for the summer ahead.

So the real issue is ensuring that you are earning money during the quieter months, which is why diversifying your business during this period can help to increase cash flow.

An example could be an ice cream truck, which achieves incredible sales figures during the summer, but if they sold the same products during the winter, their sales figures would decrease significantly.  Therefore, they could diversify to sell hot food such as burgers or hot dogs, during the colder months.

Not all diversifications are based on completely new areas, you could horizontally diversify, by offering new products closely associated with your current products, such as a pyjama company introducing a line of slippers, or a children pyjama selection.

It is not something you want to think about, but not all payments will be received on time and at that point, so you will need to have a debt recovery process in place.

Once your customers’ have passed the agreed set payment date, you should chase up on the invoice. You may also wish to apply a late payment fee to the total cost.

Once you have provided a final notice, you can then begin legal proceedings to settle any outstanding payments. This may involve you going to a small claims court, or you may wish to utilise a debt collection specialist.

If your company is business to business then the companies you deal with might pay invoices on a set date.  If you are business to consumer this might not be as relevant.

By adjusting your scheduling of invoices and ensuring you get it over to them in time for their payment window, this will ensure you get paid efficiently.

This is an important step in a credit control system, which is often overlooked by most businesses, but if you miss their payment date, you may have to wait another month.