Running a business requires you to have a steady cash flow. But this isn’t always easy to achieve or maintain. Many businesses fail for this reason. Here are some ways to avoid having that happen. 

Collecting On Payments

The faster your payments are processed the better your business’s cash flow will be. A lot of this has to do with receivables. The best way to handle them is to get a lockbox for your customers to send their payments to. As these are run by numerous banks, customer payments are processed quicker, keeping the money flowing freely through the business. At the same time, a simple request for customers to pre-authorize the check they pay with will also speed up the process. Some business owners even offer perks to customers who send in their payments before they are due.

Setting Higher Standards For Credit

Another way to keep the cash flow positive is to accept credit card payments from customers. Those who may become your customers in the future should be required to apply for credit with your business. It’s also recommended that you check the references of any potential new customers you extend credit to.

Acquiring New Customers

No matter how much business you’re doing, you’ll always want to do more. This starts with acquiring new customers. The more customers you attract who pay in cash, the better the flow of money is. Generally, these customers are more valuable to your business than those who always pay with credit.

Rewarding Customers With Discounts

When your business offers some type of reward to customers who always pay early. Though this can result in a lower profit margin, it is also one of the easiest ways to increase your business’s cash flow. 

Taking Loans As Needed

If your business cash flow problems are short-term, as is often the case with seasonal businesses, consider taking a loan. Your best options are equity loans and revolving lines of credit. But you may also consider an amortized loan, which is a viable long-term solution to cash flow problems.

For more advice on business cash flow, please contact 360 Commercial Capital.