Here are five ways businesses can address that critical problem now before it gets too late.
Late payers
Prestney says it is imperative that businesses start pressuring their debtors and get them to pay as quickly as possible.
"At the moment, you just cannot let that get away from you. When things are so uncertain there is no doubt that businesses just won't be able to survive. You want to make sure that your customers aren't some of those."
"You have to make sure you are the first to get paid."
Discounts for early payment
Of course, being the first paid can actually be a challenge. With so many businesses under pressure payment days have stretched far beyond the norm and customers are trying to find out just how much they can get away with. Prestney says you should consider offering discounts to get that cash flowing in.
"You should consider some type of discount. Can you offer a discount, or a credit facility to pay? There are plenty of things you can offer to customers."
Credit checks
Many businesses start credit checks when they gain new customers, but Dun & Bradstreet director of corporate affairs Damian Karmelich says SMEs make a mistake when they don't follow those up with further checks.
"Risk profiles change. And they should run those checks again for their most important customers, to determine both the capacity to pay and the propensity to pay."
"It's very important to understand that just because a company is big, doesn't make them a good payer. A sale is not a sale until the invoice is paid."
Keep your stock turning over
While managing inventory isn't necessarily a cashflow management issue, Prestney warns that it can be if you let it. If you're keeping excess stock around for no reason, she warns that you're missing out on some money.
"There is potential savings there in excess stock. You need to speak with whoever is managing that stock and make sure that there aren't potential savings there that are being missed."
Don't forget to find new business
These experts warn that when entrepreneurs become scared they tend to becoming blinkered and just rely on their existing customers – this is not the time for that strategy. Instead, Karmelich says you should be safely expanding and trying to find new business that won't be capital-intensive.
"You need to try and keep your business moving along, and not turning business away. It is possible to acquire new business that will not threaten the cashflow."
"The other thing to remember here is that there will be some businesses that basically say no to new opportunities because of fear. But those can offer opportunities."
Related Items :
Another great idea (If I do say so myself!) is to register with Advertising Rewards. We offer a free service that pays a 5% rebate on your advertising spend. Depending on your advertising budget this could amount to a few hundred dollars each month, or a few thousands of dollars. The extra money we pay you could be used for operating expenses, or put back into additional advertising to help generate more business.