It’s a question that business owners ponder at night, it’s one of the main goals, if not the main goal that they have: how do we improve cash flow? How can we boost it to ensure that we are constantly earning more from all the hard work we are putting in?
There are many ways to improve cash flow. There are methods that can instantly boost it, while others take longer, but have great rewards.
One of the best means to improve cash flow is to implement a direct debit system. By enlisting a direct debit system in your business, you will replace cash and cheques, meaning that money will immediately be available in your account.
How does a direct debit system improve cash flow?
Eliminate cash handling costs and hassles
If you employ a direct debit system, eliminate the need for cash handling facilities in your business. You won’t need to pay for tills, a safe, or anything else cash-related, thereby reducing expenses. Instead, you will have extra money to spend on other aspects of your business. You also won’t have the hassle of having to deposit cheques or cash to the bank. Instead, the money goes straight to your bank account, which will instantly improve cash flow.
Improve customer service – convenience & speed
Imagine how much faster the service time would be if you didn’t have to handle cash or cheques. By debiting your customers, they don’t have to constantly fill out their bank details, or shuffle around their bags for their wallets to take out cash. Your customers will love the convenience, and speed of your customer service. Not to mention, collecting recurring payments will improve cash flow because you are constantly and regularly putting money in the bank.
Collecting outstanding failed payments as soon as possible
When payments have failed to be processed, it is best to collect them as soon as possible to avoid loss of income. A direct debit system should have various avenues to assist in collecting these payments, such as a rescheduled transaction or a link to a payment site.
There are also other ways to improve cash flow which include:
- Drawing up a cash plan to keep track of all your finances and see which areas you could improve on
- Making your business environmentally friendly
- Putting your income in a high-interest bank account
- Go paperless – invest in a virtual database, email payslips rather than using paper invoices, etc.
- When it comes to suppliers, shop around for the best price
- Rent out unused equipment or space
- Take good care managing your stock. Slow-moving items should be re-stocked at a lesser rate than fast-moving stock. Also be aware of expiry and used-by dates when it comes to edibles.
To improve cash flow, tracking your finances and seeing where you can reduce expenses is vital. This is where you can observe areas where you can make changes that can give your income that boost you want and ensure that regular income is coming your way.
For more information on how to improve cash flow, check out Ezypay’s 31 Day #Cash Flow Challenge.