Remember when you were a kid and had to eat broccoli or lima beans or split-pea soup? The longer you stared at it the worse it looked. You would dread it. Usually it was cold by the time you got to it which made the taste even worse. It needs to be like ripping off a band-aid. You just gotta close your eyes and dig in so you get it done as quickly as possible.
Far too many business owners make financial decisions based on their bank account balance. But that figure is constantly in flux. It only represents the funds you have at that moment but not the funds that will soon enter and exit your bank account as you pay your expenses and revenue is received. Instead you should base your decisions on your business’s cash flow – the figure that accounts for the funds you have at the moment, in addition to the funds you will eventually pay and receive.
Bills are easy to handle since it’s up to you as the business owner to pay them before their due dates. But in order to have the necessary funds to pay your expenses, you need your clients to settle their invoices in a reasonable time frame. Collecting your revenue in an efficient and timely manner is the key to maintaining a healthy cash flow.
Here are five tips for getting your invoices paid faster and keeping your cash flow strong:
The story is always the same. First an idea is born in your mind. You finally build up the audacity to begin building the idea. You pitch it to others, you tell your friends and colleagues. “You’re going somewhere,” you tell yourself. You’re passionate.
Soon after, you get down on yourself and you start losing focus. You lose sight of the fire that got you started in the first place. By now, six months into it, you decide to abandon it and call it a “learning experience.” You tend to your wounds, rest up for three months and then start the process all over again.
As a business owner, you have a lot to juggle. And it’s likely you are constantly keeping an eye on your bank account to see how much money you have available. But how do you know if you’ve received all the funds from each day’s sales? Did the merchant processor transfer the payments that were due for that day? Were cash deposits made by your manager on time?