If you are one of the many Australian businesses knuckling down to pay off debt – these are the top five hacks for you. Whether it's your own bookkeeping practice or your client's business, these tips will put you in front in 2018.
If you are looking to expand or at least maintain your financial position, then you must put rigour in the business backend. Being firm on your terms of trade is essential to the long-term viability of your business. Here are five ways to make your cash flow.
Go on – get a deposit
It can be daunting at first, leading with the statement ‘to commence I will require a deposit’. However, it is an important step if you are going to maintain viability and grow your business in this market. Let the client or customer demonstrate just how committed they are to the job, by asking them for a 20% deposit. You will be able to prioritise your work based on when you will get paid.
There is a temptation to meet a client's burning deadline, then only to wait for weeks until they have the funds to pay you. At least having a part payment will strengthen your cash flow and prioritise your work load. Also having a well worded payment policy in place will help to strengthen your position.
Be the first in line to get paid!
On average your business will get paid four times faster with direct debit. Everyone will have a list of bills to paid, being on direct debit means your invoice is prioritised – permanently. If they are failing on direct debit you know there may be issues.
You can also agree a day of the week or month that suits the payers. Whether its when they get paid or when they know they will have money in the account. Offering a discount for signing up to direct debit may even be an option for your business, given you will save on admin time following up late payments.
Automate your reminders
Following up late payers can take hours out of your week and results in 5–10 lost work days across a financial year – that's not even measuring the impact on your cash flow.
Getting a system which allows you to automate your payment reminders will mean everyone is better offer. There are no more awkward phone calls – it is a straight SMS or email reminder.
Set up a business offset account
The bank will not often mention this to you, so request to open up a second online business account which offers you a higher rate of interest. It is an important first step to consider when growing your bank balance.
Tick tock – Value your time
We all live in a world where our days just disappear. Put a ring fence around your time by writing it down or recording it in an app like Harvest. When you've done this for some time you will identify tasks that would be better outsourced. You can then turn to freelancer.com or Fiverr to help you. Calculate the time to do the task yourself then see if you can get it completed elsewhere for a cheaper rate.
Direct Debi is running an ICB Webinar on Maximising Payment Collection for You and your Clients on Tuesday 8 May, 2018 12:30 PM.
Direct Debi is the nation's #1 online payment provider for Australian small business and ICB's payment partner. Direct Debi ensures payments are made on time, every time. Direct Debi enables small businesses to track and trigger payments when and where money needs to be collected. Visit www.DirectDebi.com.au and sign up today.
Updated: 23rd April, 2018