Member Article

How to: Make your cashflow work for you

Here at Commercial Domestic Investigations we recognise that a good cashflow can make or break your business. With SME’s faltering all over the UK due to payment problems and bad debtors, a good cashflow can make all the difference. We wanted to give you some tips to maximise your cashflow.

Where possible, ask clients to pay in advance. This means you avoid non-payment completely.

Agree payment terms with your client in advance and ask them to sign an agreement to confirm that they accept these terms.

Similarly, if a supplier gives you 30-day terms, don’t rush to make a payment, pay on day 29.

Send out your invoice as soon as possible after completion of a job.

Ask for positive feedback from your customer straight after completion, this gives them no reason to delay payment.

Set your payment terms as low as possible. 30-days may be the norm but try for 7 or even 0-day terms.

Create a simple cashflow forecast to estimate large expenses so that you can prepare for them.

Consider becoming a limited company, limited companies only pay tax bills nine months after the year end.

Get your accountant to help you budget for future tax bills so that you can be prepared for this.

This was posted in Bdaily's Members' News section by Steve Hall .