Increasing your incoming cash is an obvious, yet not standalone, tactic. Here are some tips for doing so:
- Invoice immediately: Invoice your customers right away and determine the optimal payment terms for your cash flow strategy. You can either have a cash-on-demand business, whereby customers have to pay as they receive goods or services, or else you can have a business that provides a service and allows 30 or 60-day payments. Stick to the shortest term where possible.
- Give discounts for early payments: Incentivize your customers to pay early or even to pay upfront. On the flip side, charge fees for late-payments where possible.
- Schedule upfront fees and payment intervals for projects: In the case of project-based work, make sure that a portion of the fees is paid upfront, and then schedule regular payment intervals to ensure the project costs don’t eat into your cash flow.
- Apply for invoice factoring: Invoice factoring is a specialized type of business funding whereby the business sells the lender its unpaid invoices, at a discount, in exchange for an upfront payment. This is a useful way to boost cash flow when your business has a problem with unpaid invoices.
- Offer multiple payment methods: The more payment options you offer your customers, the more likely they are to pay you. Thanks to digital payments, your customers can pay you quickly and easily. The payment option can even be linked to your digital invoicing system, so they can just click and pay.
- Consider the subscription model: If relevant, consider offering your customers a subscription option, as this will give you regular, consistent payments at the set, expected intervals. Subscriptions can work for both goods and services; for example, there are even retailers on Amazon that offer a subscription to razor blades!