When you run a business, it’s vital to keep a close eye on the money coming in and going out of it – especially during this time of rapidly rising costs. Here are six simple tips to help you track, control, and improve your cash flow. 

Ensure your invoices are accurate:

Double check! We can all be guilty of the odd typo here and there, but ensure all invoices are double (or maybe triple) checked for mistakes. If a client or customer queries an invoice and asks for a new one, it can delay the time it takes for the money to reach your bank account.

To avoid unnecessary back and forth, double-check that you’ve included the correct items, prices and customer details, and make sure your invoices include everything that HMRC requires.

Keep your business and personal finances separate:

Limited company directors must have a separate bank account for their business, but there is no legal requirement for sole traders or partnerships to do the same. However, its much easier to keep track of your cashflow if you keep business and personal finances separate. This will give you a clear picture of what’s coming to and what’s going out of your business.

Chase late payments promptly:

Chasing customers for unpaid invoices can be time-consuming, and often a little awkward, but if you want a healthy cashflow, its crucial. Remember to send your invoice promptly, and then follow up with a little nudge. Persistent late payers may require a firmer tone or face-to-face conversation to discuss the importance of timely payments moving forward.

Encourage your prompt payers!

If your customers do pay you on time, it’s a good idea to send them a little thank you note to let them know that you and your business appreciate their prompt payments.

This sort of positive reinforcement is simple, but it can go a long way to ensuring your customers pay promptly when they receive your next invoice.

Review your customer base:

Identifying the customers who pay you later than others can help eliminate some of the uncertainty of your cashflow forecasting. It might also make you reconsider working with them again…

Understand your near-term cashflow data:

Having a clear understanding of what the near future holds for your business is crucial when it comes to making the right decisions about income and expenditure.

Need some support to review your cashflow? We’d love to help.

Get in touch today on 01234 326 447 to speak to one of the members of our team.