For many small businesses, cash flow is the biggest issue they face day-to-day. But, monitoring cash flow doesn’t have to be a constant headache. There are many things you can do to be improving cash flow and help make sure your cash flow remains steady:
- Put together a cash flow report that lists your expected cash inflows and outflows over the course of the month. This helps you see where you may have a shortfall and gives you time to come up with ways to compensate.
- If you are working on a project that will take weeks or months to complete, invoice the client multiple times over the course of the project. This will help keep your cash flow steady. Most clients would prefer to make several small payments over a long period of time anyway.
- Monitor your accounts receivable closely and send client statements out at least once per month. Also, call any clients who haven’t paid their invoices within 30 days. Often times, one call will be enough to get the bill paid quickly.
- Pay all of your bills when they are due, but not before. There’s no reason to pay funds out early. Especially, if the funds are in an account that earns interest.
- Consider opening a revolving business line of credit. This will help cover you if you have a temporary cash shortfall.