8 Ways to Improve Your Small Business's Cash Flow

Cash flow is the lifeblood of any small business. If you don't have cash coming in, you can't pay your bills and you will eventually go out of business.

In this blog post, we will discuss eight tips that can help improve your small business's cash flow. Implementing these tips is easy and can be done without paying outrageous fees. So read on to learn how to get started!

Here are a few tips that can help improve your cash flow easily without being forced to pay outrageous fees.

1. Offer discounts for early payment - Incentive your customers to pay early by offering a discount of 2-5% on their purchases. You'll get paid earlier, and they'll be happy to save some money.
2. Pay vendors with a credit card - You can use an AP (Accounts Payable) platform like Melio to pay your invoices with a credit card, even if your vendor doesn't allow you to do so. Fees are as low as 2.9%, you can earn rewards like cashback, and you'll have up to 60 extra days to pay.
3. Manage your credit policy - Cut back on lenient credit policy. You can negotiate new policies with existing customers and change the ones you offer new customers.
4. Consider faster ways to get paid - AR (Accounts Receivables) platforms allow you to get paid faster with credit cards and ACH payments and save the time spent waiting for checks to clear.
5. Track your inflows and outflows - Use accounting software to track how much money is coming in and out of your business to better plan and manage your future cash flow. Know how much money you'll have at the end of the month to pay yourself, etc...
6. A line of credit or factoring - You can ask your bank for a line of credit to consistently bridge between your revenue and expenses. Banks also offer Factoring - allowing you to "sell" your future revenue at a discount, essentially offering you an advance on a future payment.
7. Send invoices quickly - send your invoices as quickly as you can. The faster you send out invoices requesting payment for your work, the quicker you’ll get paid. Get used to sending an invoice to your customer as soon as the work is done.
8. Charge late fees - By charging late fees, you can create additional revenue for your business and penalize late customers. Clearly state your late fee policy on your invoice, so customers aren't surprised.

According to the latest statistics, most small businesses in the U.S (66%) struggle with cash flow, and nearly a third (31%) are unable to either pay vendors, themselves, or their employees due to cash flow issues. So what can be done?

Cash flow is very difficult to manage and control. So, by deploying some of these simple tips, you can help boost your company's financial resources without spending too much time or money, so you can quickly get the upper hand on your company’s finances and improve your cash flow.