By Wayne Edwards ANZ Regional Executive
Shortening your cash cycle will boost your cash reserves, keeping your business going and providing a buffer in times of financial uncertainty. The longer your business goes without cash, the longer it takes you to pay your creditors and the riskier your business becomes.
Below are five ways of shortening your cash cycle to help you get paid sooner and to ultimately remain in business.
1. Invoice immediately
Why wait until the end of the month to invoice your customers? Sending invoices immediately encourages prompt payment.
2. Incentivise early payments
You can also encourage prompt payment by offering incentives for customers to pay early. Your invoices should always state a specific date of payment as your customers are more likely to pay attention to a specific date.
3. Always run credit checks
Even the smallest businesses need to have credit policies in place that provide guidelines for determining which customers will be extended credit and on what terms.
4. Use shorter credit terms or stick to cash
Shortening your credit terms or removing the credit option altogether should only be considered if your business is facing ongoing customer credit issues or experiencing cash flow problems.
5. Be wary of credit card fraud
It’s the merchant that usually bears the risk for credit card fraud, so follow some basic procedures such as:
Customers are now required to enter their PIN numbers, if in doubt ask for another identity document such as a driver’s licence or passport. Being wary if the card is presented loosely – or isn’t taken out of a wallet or purse.
Talk with your local ANZ Small Business Specialist Cara O’Dwyer on 0434606532 or Chris Cook on 0432755997 about how we can help your business shorten its cash cycle.
ETC BusinessLeaders presents Robert de Castella
Proudly presented by ANZ Bank this lunch presentation by World Champion marathon runner and Managing Director of SmartStart Robert de Castella (Deeks) is not one to be missed.
14 July, Novotel Pacific Bay Resort, 12pm to 2pm. For more details and to reserve your seat visit the booking page or call 66485400.