The Small Business Administration cites that over 50% of businesses fail in their first five years. Most of the business owners listed negative cash flow as the number one reason they had to close doors. Negative cash flow can limit your ability to pay bills on time, limits growth opportunities and ultimately forces a business to close.
The following practices will help business owners turn cash flow positive without taking on new debt or a new partner!
- Email your invoices immediately and correctly. It may seem obvious to bill as soon as services are delivered, but some companies only issues invoices once a month. Be sure your invoice includes terms, due date, and your ACH information to receive prompt payment.
- Cleary state interest penalties for late payment. Your business might be a manufacturer or service company, but you’re not a bank! You’re already giving your customer 30-60 day payment terms.
- Use accounts receivable factoring to get your money immediately. Business owners can get immediate cash by selling their invoices to a factoring company, like American Receivable. Within 24 hours American Receivable will wire you your money so you can get back to running your business instead of chasing late payments.
- Lease your computers and equipment. Cash is king and leasing allows you to keep more of your cash. Leasing can also improve your credit score and give you a tax write off at the end of the year.
- Get mobilization money. Large orders require more time and expense. Your customer knows this. By getting a portion of the contract up front you can gear up on your customers money! After completion of the project, you can offer extended payment terms if necessary and take advantage of American Receivable to keep your cash flow positive.
- Pay employees bi-monthly. Most companies issue payroll every Friday or every other Friday. By switching to a program that issues payroll on the 15th and the last day of the month you’ve reduced your payroll to 24 payments annually! This also improves your employees cash flow.
- Run credit reports on your customers. Before you start working for a new customer pay for a business credit report to discover how they pay their bills. This is a free service for clients of American Receivable.
- Start paying bills online. Some companies offer discounts for online payments. You can buy a little more time with online payments by waiting until the last day to make payment. Happiness is Positive Cash Flow
By implementing these strategies business owners can turn negative cash flow into positive cash flow.
American Receivable has sped up their client’s cash flow for over 43 years. Call today to find out how quickly we can help you. Let the experts at American Receivable help your business grow. We have helped companies improve their cash flow with invoice factoring. It’s now your turn; call us today at 1-800-297-6652 or complete our quick application form.
