If you own or run a business or if you are involved on the financial side, you will know just how critically important effective cash flow is.
It really is the cornerstone of running a profitable business.
The key to it all is of course getting paid on time, and with this in mind we’ve put together a few tips to help you keep everything under control.
1: Ensure everyone is working to an agreed payment plan
As we said above, the starting point here is simply getting paid at the right time for the work you do. This means agreeing up front the payment terms and having these written into your agreement or contract. Ensure therefore that you actually have a conversation about this with the right people so that you all agree when the work will be completed, when you will issue your invoice and when it will then be paid (and also how!).
2: Look at and agree timescales
There is nothing saying that your business payment terms must be 30 days. When it comes to smaller and start-up companies this may simply not be workable. Following on from the above, it’s all about coming to an agreement and if you require payment ‘in seven working days’, then that is your starting point.
3: Issue your invoices promptly
This is all down to you! It is always best to issue your invoice as soon as you have completed the work or as soon as you’ve had it signed off.
4: Staged payments
There are also staged payments and these could be essential when it comes to ongoing pieces of work or contracted work. Again you will agree where in the process the staged payment will be made and the amount.
5: Don’t hesitate to chase
You also need to create a structure and system (and have the right language in place) so that you can comfortably chase a payment when it is late. You’ll then find it easier to keep everything polite and professional.
We can help
And if you’ve tried everything here but you’re still having cash flow issues, then Aspirations Accountancy can help. We can help you manage any nearly due, due or long-term overdue account. This can be quite a tricky area and, because we have the right experience, we can take everything off your hands and ensure it’s all done impartially and professionally.
We can also help you with effective cash flow forecasting and planning and also talk to you about alternative ways of raising cash whilst waiting for a payment to come in.
For more information or to get started, please call Aspirations Accountancy on 01634 298238 or email email@example.com