As your Chartered Accountants in Nelson and Marlborough, we’re pretty keen on that old business saying… “Revenue is vanity, profit is sanity, but cash is king.”
- Invoice regularly and on time. If you wait seven days before you even prepare your invoice for a customer/client, you have already delayed that cash coming in to your business by seven days.
- Collect receivables. This comes down to your terms of trade and payment. Make sure that your terms are clear on your invoices and follow up on them. If your terms say that you charge on overdue accounts, then be sure that you do. Some businesses find that rather than impose late payment fees they’re more successful in collecting receivables if they apply a prompt payment discount.
- Hang on to your cash for as long as possible. Don’t fork out for your accounts payable until they are actually due; but be sure to pay them on time to avoid late payment fees! Talk to your suppliers about their payment terms and negotiate better deals.
- Subscription sales. Offering deals on your products or services to customers who buy for a fixed period of time is a win-win situation. Your clients/customers get a better deal and you get the cash up front.
- Invest in an accountant. Once again, that’s where we come in… We can review your cash flow forecasts and results on a regular basis to measure your performance and business success, and to help you make strategic decisions about your business, by forecasting the financial impact of those same decisions.