All North Queensland small businesses know the start of the year always creates a cash crunch. A combination of the holiday break, a slow start to the year and the wet season often sees a reduction in timely debt recovery impacting all businesses.
There are however, a few easy to implement strategies you can use to improve your cash flow and get off to a positive start in 2019.
Payment gateways
There are many products available to small businesses that allow your customers to click a link on your invoice and pay instantly. For example, products like PayPal and Stripe will allow you to easily add a button to your Xero/MYOB invoices so that customers can click and pay with a credit card or direct debit instantly. Being able to pay easily via credit card removes payment barriers for customers resulting in faster payments.
Progress fees
Many businesses bill upon completion of a project/job instead of as they progress. This creates cash flow pressure as invoicing is delayed until a job has been completed. Additionally, any disputes at the end of the job can also result in further delays. Agreeing to progress payments against pre-set milestones alleviates many of these issues. For anyone having trouble managing progress payments there are many online workflow management tools, such as Workflow Max, that can help manage the process.
Recurring payment authorities
For customers where you have pre-agreed ongoing work, a recurring payment authority can take the hassle out of chasing payments. A service such as PayPal can manage monthly credit card or direct debit payments to make sure you get paid on time.
Business accounting and payment technology has come a long way in the past few years. It won’t solve all your problems however, it can help reduce debtor days and boost your bank balance. If you haven’t investigated payment solutions recently you can guarantee you are not maximising your cash collections.
If you are looking for ways to help alleviate issues of a potential New Year Cash Crunch, feel free to contact our team today to discuss options.
