Update 1 December
Keeping your business healthy and yourself in good cheer through the spikes and surprises of seasonal sales takes know-how.
How do you keep control of your cash flow and steer clear of those seasonal slumps? There are many tactics you can use in December and January to help with cash flow and manage the spikes. Here are 9 top tips for staying in charge of your cash flow.
1. Reduce payment terms and offer incentives
Research shows Australian small businesses are typically being paid 26 days late, so finding ways to encourage customers to pay on time around Christmas and New Year is particularly important. It’s the season to ask for earlier payments. If your terms are typically 14 days, take them down to 8; 30 days goes down to 14, as suggested by James Solomons of Xero. adding that providing incentives in the form of discounts for early payments is another means of getting dollars rolling your way.
2. Invoice immediately
Waste no time in sending out invoices or chasing up slow payers. Good accounting software lets you automate statements and friendly reminders. It should be set and forget. Make sure you’re on busy customers’ radars a few days ahead of payment being due. If a customer misses the payment date, a prompting phone call or SMS may help.