If you run a small business, you're probably well aware: Having problems with cashflow can be crippling. If you don't have the capital available to pay your employees and address other financial needs, your organisation might be in jeopardy. For this reason, it's best to be proactive about collecting debts from your customers quickly and getting cash in hand.
If you encounter cashflow problems in the course of running your business, how will you address them?
However, this is sometimes a struggle. Sometimes debtors don't want to pay up in a timely fashion; in other situations, they want to do so but simply can't find the cash. If you encounter problems like this in the course of running your business, how will you address them?
Protecting your profits is key
Everyone wants to make a profit in business, but unfortunately some have trouble doing it consistently. Often, the problem isn't sluggish sales, but an inability to collect on those sales. The latest "Payment Practices Barometer" study from Artradius found that 24 per cent of Australian companies say cashflow is the biggest challenge to their profitability.
"Due to the vulnerability of its economy to low commodity prices, many Australian businesses have a strong focus on trade receivables management, and on protecting their cashflow and profitability," Artradius' Mark Hoppe said.
Attacking cashflow trouble on two fronts
If you're experiencing cashflow trouble at your business and you're eager to do something about it, you may need a multi-pronged approach. The Pulse Australia recommends attacking the problem on two fronts - one is tightening up your trading terms, and the second is enforcing those terms.
You might decide that giving your clients 30 days to pay is too much; you need cash faster. That's a good first step, but you also need to follow up - the second step is enforcing the rules by reminding your customers that they need to pay on time consistently.
If that fails, the other option is to look beyond your business' four walls for alternative finance solutions.
Getting fast cash when you need it
If you need to improve your company's cashflow and it doesn't seem like anything is working, one solution you may want to try is debtor finance. At Cashflow Finance, we can offer you upfront payments of up to 80 per cent of the amount your customers owe you.
Using debtor finance is a great move for all sorts of businesses, small and large alike. If you need a little help smoothing out your company's cashflow, all you need to do is ask.