Cash Flow Tips to Help Your Business Grow in the UAE
Cash flow is the lifeblood of your business. Money must continue inflowing and outflowing for optimum business health, with the obvious goal being that you bring in more income than you must spend on expenses.
The secret to improving your business cash flow is not about the income, but also cutting down expenses. You will need to manage your expenses well. In this guide, you are going to learn cash flow hacks and tips that will boost your business.
Prepare Your Invoices Immediately
Small businesses are fueled by sales and invoices. Without invoices, you cannot get paid. It is that simple. Ensure that you always stay ahead of invoicing your clients. The faster the invoice goes out, the faster your money comes. If the current process is slow and strenuous, then you could opt for accounting software such as Zoho Books and QuickBooks to help speed up the process and increase cash flow.
Encourage Your Customers to Pay Invoices on Time
Another way to increase your cash flow is to encourage your customers to pay invoices timely. We understand this is not easy. However, there is a practical approach to increase the chances of getting paid quickly.
Send Invoice Reminders
Send a reminder to your clients when invoices are due. You can send emails at least a couple of days before the invoice due. If they do not pay, call them instead and send reminders continuously. This is a nice way to encourage your clients to pay within the required time.
Give Out Incentives as Much as You Can
Consider giving your customers discounts who pay invoices before a given duration. If the invoice is due 30 days after sending the invoice, but you want them to pay sooner, give them a small discount. Clients that want deals will pay invoices, meaning you get money faster.
Impose Late Payment Penalty
Having a strong invoicing policy is certainly critical. Decide on a consistent period when all the invoices are due. For example, say after 30 days and follow it to the letter. It would even be better to choose a specific date when invoices are due. This will help boost your chances of getting your money and it also shows that you are a professional.
As for penalties for payments, be upfront about it, when you will charge and the amount for penalty. Normally, you would include terms and conditions segment on the invoices. Conduct some research on penalty policy.
Consider Invoice Factoring
If these strategies are futile or you want money immediately, another approach is invoice factoring. This is the process of selling unpaid invoices in exchange for immediate money. The factoring firm takes a small cut of the cash you earn. The factoring company takes a small amount of money. The good thing about this is that you are not waiting for customers for long.
Expand Sales Market
You can also increase cash flow by looking for new sources of income. Gather your team and find new ways to expand your brand. Here are some ways you can expand your sales outreach:
Include New Products or Services
Consider current products or services that your company offers and take into account those that would be a positive addition to your company. It is always good to think out of the box and take into account different ways to generate revenue.
May be your event planning could add cleaning as one of the services or if you are running a hotel, you may add new dishes. Be creative regarding new ways to generate revenue, which consequently increasing cash flow.
Come Up with a New Marketing Strategy
If you have topnotch products or services, maybe you could improve your marketing strategy. Find new ways to get the word out. If there are other people who could experience your products or services, then go for it. Bring in more cash flow.
Excellence Accounting Services is dedicated to helping businesses and companies to take control of their finances and increase their cashflow, by leveraging their resources and strategies. We encourage you to consider these cash flow tips.