Sort your pre-Christmas invoicing. Forget your regular invoicing cycle and get any leftover invoices out straight-away. Also look to 50% payments on future jobs – do whatever you can to get that cash flow looking healthy.
Set Your Payment Terms. When it comes to client payments, don’t let companies extend their terms. Ensure you state your terms and stick to it. This is a good practice to keep for the rest of the year: if a company won’t accept your payment terms or wants a longer payment period, then consider whether you want to work with that company ongoing.
Speed up Your Debt Collection. Get your accounts department or book-keeper (or yourself!) to chase up any outstanding debt immediately. While this will stimulate your cash flow now, it’s also a great opportunity to look into your collection cycle because this area of your business can really have a positive impact on cash flow in the future.
Know Your Financing Options. If you’re up-to-date with your invoicing and payments, look to companies like Kikka who provide up to $100,000 credit line loans in a short timeframe. We can help get you over your February woes quickly, easily and without any huge paperwork or demands on your time.
Reduce Your Capital Needs. Order less stock more frequently. This ensures you stick to a tight, but savvy, inventory while reducing your outgoings. Consider what sells at this time of year and which are your higher margin/high turnover products, and concentrate on those until cash flow picks up. Also look at what you can liquidate and what you can secure on consignment.
Speak to the Tax Office. If your cash flow is weak and your BAS payment is looking scary, call the ATO. The Tax Office is happy to work with those who work with them. Ask for an extension, tell them what you’ve put in place to ensure the debt it paid off quickly, and make sure you save 20-30% of your incoming payments for the next cycle – don’t be caught out again!
Apply Your Knowledge. Use your February cash flow findings and strategy to sort your cash flow issues ongoing. Many businesses actually fail due to cash flow, so it’s important to get it right for not only the post-Christmas hump, but also the future of your business. Business consultants will tell you that even the most talented and super-savvy entrepreneur will see their business go under if they don’t get their cash flow sorted. Plus, getting this right can also alleviate a lot of stress from you, and leave you able to not only succeed, but also grow thanks to the ability to invest in future capital thanks to companies like Kikka. For more information about how to apply for a loan with Kikka, click here or ring 08 6222 6667.