Cashflow tips

10 easy tips to help sustain your cash flow and help keep your business strong during challenging economic times.

These include:
More Information
  1.  Accurate and timely invoicing
    Issuing accurate and timely invoices supported by appropriate documentation (e.g. delivery dockets, purchase orders), helps prevent unnecessary delays associated with your customer having to validate and approve the invoices before they are paid.

  2.  Understand and negotiate invoice terms with your customers and suppliers
    Explore options such as offering a discount for early payments from your customers – this may help you receive funds quicker. Negotiating the same with your suppliers may also help you take advantage of discounts as your cashflow efficiency improves.

  3.  Encourage staff to collect the cash on time
    Reward your staff for collecting payments on time to improve cashflow.

  4.  Easy payment options for your customers
    Giving your customers a variety of simple payment methods assists in receiving payment on time and increasing cashflow efficiency.

  5.  Maximising returns on surplus funds
    Use an interest bearing business account for your surplus funds, linked to a transaction account and managed through online banking to give you greater control over your money.

  6.  Communicate from day one
    Constant communication with your customers is crucial to improving debtor days and the best way of getting an invoice paid on time. Regular follow-up is the key.

  7.  Develop a collection plan
    Develop an action plan for overdue receivables. Try to understand your customers’ situation but carefully balance the impact delays in payment are having on your business. It is important to gain some form of payment commitment from your customer and if a part payment or a payment plan is possible, this may help ease your cashflow pressures.

  9.  Borrowing against your business sales invoices
    Borrowing against invoices rather than your fixed assets assists your financing facility to grow as fast as your business grows.

  10.  Outsource your debtor management
    For businesses that want to improve their debtor management, but don’t want to build an in-house accounts receivable capacity, outsourcing can be a viable option.

Next steps

For more information, talk to your NAB Business Banker who can review your existing accounts and help strengthen your cash position. Ways we can help you include: