If the graph of revenue and profit is growing towards upwards direction with high speed, then it indicates that your company is performing well. But, you should continuously put in a lot of effort to maintain this growth of your company. Sometimes, even the fastest-growing company faces cash flow problems.
Therefore, it is very important to maintain the optimum cash flow in order to ensure good liquidity in your business. The best way to maintain the optimum cash flow in the business is to invest in the accounts receivable software. Here, we are going to discuss various methods and new strategies to maintain the optimum cash flow in the business.
1. Lease Your Supplies
Leasing is a good option to maintain good cash in your hands. The leasing supplies, real estate, and various machines may end up more costly as compared to buying all these things. But, it will help you to maintain some cash in your hands to manage the day-to-day operation. So, if your company is flushed with cash, then you can choose a buying option.
Otherwise, leasing is the perfect way to maintain cash and get access to various other important things for the operation & growth of the business. If you choose the leasing option, then you can pay the amount into small installments, and you do not need to pay the whole amount in one go. Moreover, there is one more benefit of leasing that lease installments can be included in the business expenditure and help to reduce the tax amount.
2. Discount for Early Paying Customers
People love to have incentives! If you provide a discount on the bills of your customers, then they will love to make payments before the deadline. Offering a discount and get payment before the deadline is like a win-win situation for customers and business owners. If you get the cash in your hand before the deadline, then it will help to maintain the cash flow in your business. You should keep eye on account receivables with the help of the accounts payable software.
3. Check the Credit History
If any customer fails to make payment in cash, then you should check the credit history of the customer before extending credit. It is recommended that you should never extend the credit to the customers who have a poor credit history. The client with bad credit history would not pay you back. Ultimately, it will affect the cash flow in your business and also incur losses. There are various accounting software that can help in accessing the credit history of the customers.
4. Purchase in Bulk
You should get the supplies in bulk amount so that you can get the material at a low price. It is recommended that you should think about power in numbers. You should stay in touch with the suppliers and create a good relationship with them. The suppliers are ready to offer a huge discount if you buy from them in bulk.
5. Keep Inventory in Check
You should keep your inventory in check. It is imperative to make a list of goods that are not selling at a fast pace, just like other products in the inventory. These kinds of products that are not selling at a fast pace will hurt the economy and act as an impediment in the cash flow.
It is recommended that you should stop the production of these kinds of goods and materials. These products can hold a lot of cash and lead to a loss in the business. You should immediately get rid of these products.
6. Send Invoices Instantly
You should send the invoices to the customers immediately after making the purchase. It will help you to maintain the account receivables efficiently. You should invest in the good account receivables software that can help in maintaining the good cash flow in the business.
The latest technology software can help you to automatically send the invoices to the customers so that they know how much they have to pay and what the deadline is. You can encourage them to pay before the deadline by offering discounting in early payments and charging them late payment fees for delayed payments. It is also recommended to invest in the accounts receivable collections software to maintain the cash flow.
7. Ready to Receive Electronic Payment
You should allow your customers to make payment through the electronic payments technique or by using the smartphone payment application. You should allow your customers to make payments from different methods. It will help you to collect payments as soon as possible and offer convenience to your customers. You should never pile up too much debt because it can affect the cash flow of your business. The AR collection software can help in collecting the payments from customers.
8. Pay Less to Suppliers
You should maintain a healthy relationship with the suppliers and always stay in touch with them. By forming a good relationship with suppliers, then you will get a better chance to have supplies at a good price.