During the lifetime of any business, there will be times when there’s not enough money coming in. When that’s the case, if you don’t act promptly, it could potentially spell the end for your business. However, tackling cash flow problems head on will give you the best chance of getting your company and its finances where they need to be.

In this article, we will look at several ways that you cut costs and relieve pressure on your cash flow.

Cut costs

This is the first and most obvious way to save your money – in times of dire straits, available cash becomes more and more precious as each day goes by. You should look at what money your business is spending and what you can stop spending money on now without adversely affecting operations.

Be careful to not cut back too much as you don’t want to reduce capacity for when times are better.

Talk to your suppliers

This does not mean that you should decide unilaterally to pay suppliers’ bills late. If you do choose to do this, as many businesses do, you risk jeopardising the relationship that you have built up with these companies.

Instead, explain your situation to them. Ask them if they will be flexible with upcoming bills. It is, after all, in their best interests that they support you now so they can continue to sell to you in the future.

Reduce the credit period given to customers

If you’re giving your customers anywhere between 30-60 days to pay invoices, cut down the time you offer to receive payment faster.

You can’t do this with the invoices that are already sent out. However, you can call your customers with an offer – for example, you could offer a small discount if the invoice is paid within a given number of days.

Chase unpaid invoices

Depending on the level of overdue and unpaid invoices out there, you might be able to solve your cash flow problems all in one go if you get your clients to pay now.

If someone is late, send them an email reminding them that payment is due. If they don’t respond, give them a call. If they refuse to take your calls, send them a letter of demand.

Try not to burn any bridges here. If they’re long-term customers, chances are that they will buy again. Be careful not to lose out on any potential future revenue by going overboard with your chasing and the tone of voice that you take during that chasing.

Delay your expansion plans

If you are experiencing cash flow issues, the last thing on your mind should be growing your business. If you have any plans to open new offices or shops or take on a lot of new employees, they should be delayed as soon as possible.

If you cannot afford to run your business at is current size comfortably because of a temporary cash flow problem, running a bigger one will only amplify your problems.

We can help

If your business is experiencing cash flow problems and you want help from professionals who have guided clients through similar stressful times, call us on 01606 333 900 or email us at hello@burtonbeavan.co.uk.