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5 Quick tips to deal with cash flow problems

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If you run your own business, then you’ll understand the importance of cash flow. In fact, creating a relationship with money that works for you is one of the best things you can do for the future of your business. So what do you do when the well runs dry? You really don’t want to dip into your personal rainy day fund so here are some simple tips for dealing with those cash flow problems.

Ask for lines of credit

A line of credit works in a similar way to a credit card. You receive a product or service, and once you pay the invoice in full by the end of that month, you pay no interest on the credit. This is a very common way to pay for small businesses to pay for services or materials over the course of a month and could help you out of a financial hole in a pinch.

Negotiate better terms

If you already have a line of credit with a supplier, then perhaps you can try to negotiate a better deal. Say for example, if you usually must pay at the end of the month, ask if you can you extend this to 60 or even 90 days. This extra time could make a real difference and allow you to receive payment from your customers and clients before having to pay your suppliers.

Get a short-term loan

A short-term loan is a great way to give your business a quick cash injection while not taking on any significant debt or committing to a long-term financial product. The easiest way to get a short-term loan approved quickly is by choosing a financier that specialises in this particular form of credit. Lenders such as Spotter Loans will not only approve your loan in double-quick time, but they’ll also help you out even if you have a bad credit rating.

Give your clients incentives to pay faster

If you find that getting your clients or customers to pay on time is getting harder and harder, then you can offer incentives for prompt payment. This could be a small discount on future purchases or even a discount on current invoices if the invoice is paid immediately. You should also consider setting up auto payments or accepting payments online. The easier you can make it for your customers and clients to pay, the more likely they will pay on time.

Reduce your expenses

Take a look at your business expenses and try to pin down those which are unnecessary. And no, it doesn’t matter how small those outgoings are – if you don’t need it, don’t spend money on it. Look at everything from industry magazine subscriptions to company vehicles and if it’s not needed, get rid of it. While this is by far the best approach to take, it will only eliminate future cash flow problems and may not have much of an immediate effect.

Follow these simple tips and not only will they help your current cash flow woes but your business could enjoy a healthier long-term outlook. But remember that a temporary cash flow problem is not something that you need to worry too much about, but still, it is something that you need to address. Leave it too long, and even these quick tips might not be enough to stop you dipping into your personal rainy day fund.

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