Do you find you are so busy building your business that you don't get around to invoicing regularly? You're not alone. This is a common, but potentially crippling, problem.
Create Incentives for Faster Payment
Small businesses can sometimes cut the time spent waiting for payment by offering a discount for quick payment. You may have received bills from businesses offering discounts of 1% or 2% for payment within 10 days. If you were going to pay the bill within 30 days anyway, you may as well pay up right away to get that extra discount. Good for profit and great for the business's cash flow.
Avoid Slow Payers from the Start
The best way to avoid cash-flow problems because of people not paying is to weed them out before they start owing you money. So if someone is about to become a significant customer, do your homework. Check out credit references. Call other businesses that have had a relationship with the client.
Use Barter Instead of Cash
You could reduce the strain on your immediate cash if you need something from someone and can offer goods or services of your own in return.
Trim Your Inventory
OK, so you can't go to a "just-in-time" inventory management system like many larger manufacturers. How about "just-in-less-time?" Money spent on inventory is money that's not producing any interest or savings for you.
Sometimes reducing inventory can be pretty simple. Why not make a list of all your obsolete and slow moving stock and sell it at a discounted price.
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