Cash crunch putting your resources in a bunch? Get started on these insider tips for healthy cash flow.
Delayed payments can really set you back and most of the time you’ll be investing a lot of time and energy following up with clients. So why not save all the trouble right at the beginning? Small businesses generally don’t vet clients because any opportunity is a good one, but sometimes not all of them are good. So you can start by sizing up your clients by starting small. Take up small projects first and if the clients are prompt, you can start bigger projects else you can look for more promising clients.
Being careful about choosing your clients doesn’t mean being too picky. Depending on just one client for work and payment can be tricky. What if the client turns out to be one of those late payers? Are you going to keep waiting? Keeping all eggs in one basket doesn’t help. so make sure you have a diverse client base.
Another way to handle late payments is by signing your clients up on platforms like Upwork & Freelancer.com which might take some commission from you but at least they ensure payments are made. Upwork handles collection of payment from your clients based on timelines you choose like weekly. Monthly etc. Freelancer.com has a unique feature called Milestone Payment System which makes your clients pay at certain predetermined points when you hit a particular level of goal completion. You not only get your payments on time but also less you’re less likely to losing it in the mail.
A business credit card from your bank can be your safety net. But getting it requires you to have a good credit score. Make sure you make your credit card payments regularly. In case of emergencies, banks are quick to help you with a business credit card. So keep a consistent credit score, so that you can use it when in need.
Another such emergency-friendly hack is using your receivables for a quick loan. Platforms like Fundbox are really picking up among small businessmen. The loan will cost you alright, but if you really have urgent payments to make like payroll, etc you can fall back on using your receivables for a loan and you’ll have enough time later to build on cash systems that will keep cash flowing. Quick loans like these will at least keep you in the business and on your toes when it comes to cash flow!
