Cash Flow Tips-Part 1: Five Easy Ways to Boost Cash Flow During a Slowdown

Summer’s here! And with it come thoughts of vacation, relaxation and slowing down.

The effect on most businesses, of course, is that cash flow typically takes a big dip. The looming threat of a recession doesn’t help any either.

But there’s good news. I’ve come up with some tips to help prevent a warm weather cash crunch that may even boost your bottom line.

1.  Ask for your money.

This is a great time to get caught up on your Accounts Receivable and get paid for the work you’ve already done. Review your clients’ accounts and send out statements to remind them that they owe you. 

If you regularly send out statements and still have some slow payers, pick up the phone to give them a friendly nudge. Calling your clients will not only remind them to pay you, but the personal contact from you may remind them that they have more work they’ve been meaning to send your way.  

2.  Invoice your clients promptly.

Riding on the heels of tip #1, be sure to invoice your clients promptly for the work you’ve already done. The longer you wait to send your bill, the longer you’ll have to wait to be paid. Don’t let your client’s “forget” how valuable your services really are. Invoice often and promptly!

3.  Focus on any projects that are nearly done.

If your receivables are in good order, the next quickest way to get money in the door is to finish any projects that are near completion. The sooner you finish them, the sooner you can issue your invoice and the sooner you’ll get paid.

4.  Require a deposit on new projects.

If you have more than your fair share of slow-paying clients, or worse yet, clients who never pay you at all, this is a great time to start weeding out those deadbeats who don’t appreciate your work.

Start charging a 25%-50% deposit up front on new projects coming in. By doing this, you will actually raise your clients’ perception of your professionalism and repel those who don’t truly value your services.

My clients who have had the courage to follow this advice are surprised by the remarkable increase in cash flow, and they are now attracting more high quality, fast-paying clients.

This tactic seems riskier than it really is. If you take the leap of faith, you’ll see an instant increase in cash flow and build a higher quality client base. 

5.  Up-sell, cross-sell, and get referrals from your best clients.

Are your clients aware of the different services (or products) you provide? Send out a personalized letter or greeting card by snail mail to all your best clients.

Tell them about anything new that’s going on in your business, such as your new Web site, a new service offering, etc. Include a separate card that lists all your services and contact information for easy reference. 

Tell your clients how much you enjoy working with them. Mention that you would love more clients just like them, so you’d welcome any referrals they could send your way. 

Just the personal contact from you will usually bring in more business, as well as wake up your clients to the idea of sending you referrals. “Warm and fuzzy” works.

The summertime is a great season to clean up your receivables, weed out less desirable clients, and pull in new business. By implementing these five strategies over the next few months, you’ll not only boost your cash flow in the short term but grow a strong and healthy business for years to come.

Additional Resource:

If you’d like to learn how to build a simple system to boost your business cash flow year ’round, then you will want to take a look at my special report, Cash Flow Kick-Start.

WANT TO USE THIS ARTICLE IN YOUR OWN BLOG OR E-ZINE? You have permission to re-publish it, as long as you include the following author’s bio and link:

Gabrielle Fontaine, PB is a freelance Professional Bookkeeper and Certified QuickBooks ProAdvisor. She specializes in assisting Internet-savvy entrepreneurs to get control of their books and maximize profits. Gabrielle also publishes the business-boosting online ezine, Smart Money Choices. Get more information at http://www.BookkeepingDirect.com