Many businesses will soon be returning to normal and it is inevitable that these businesses may be reviewing their approach. A concern of many businesses is managing their cashflow to better their business output and to allow their businesses to run smoothly after a challenging time.
Cashflow is the lifeblood of any business and so it is important that a healthy cashflow is maintained. A healthy cashflow is not only about having a constant stream of money coming in, it also has a range of benefits that allow a business to become future-proof, something many businesses will be looking to do now. Here are some of the important benefits a healthy cashflow can have on your business:
Pay staff on time
One of the most important factors of a business is its employees. A business cannot run without its employees, so it is crucial that they are being paid on time. Your employees are your front-liners and often the face of your business ensuring that you are always paying them on time is essential, not only for employee satisfaction but for the smooth running of the business.
No pressure of budget restraints
Business have no doubt been under a lot of pressure over the past couple of months so, when getting back on your feet, budget restraints are the last things you want to worry about. A healthy flow of cash can allow you to focus on other areas of your business and not have to worry about limiting your budgets in other areas to achieve this. At Skipton Business Finance, we understand that not every business will have the working capital needed for this, and that’s why Invoice Finance can help. An Invoice Finance facility can plug the cashflow gap where you would usually be waiting for customers to pay.
Purchase materials needed to fulfil orders
Small businesses may find it difficult to maintain a healthy cashflow when you need to buy materials and supplies before your customers have paid you for previous work. Having a consistent cashflow means you can manage your incoming orders as well as purchasing the needed materials to do this. A good flow of cash into the business allows you to have the flexibility of buying materials upfront without having to wait for other customers to pay you first.
Pay suppliers and other bills
As mentioned above, along with paying employees, buying materials and other costs, many businesses will have supplier payments to make too. It is important for businesses to maintain a good working relationship with their suppliers which is why it is essential that you are paying them on time. On the other hand, it can sometimes be difficult to do this if you are waiting 30, 60 or even 90 days for your customers to pay for the service you have provided. You may find your business short of the cash needed to pay suppliers before this time.
Grow your business
Most of the time, businesses will hold off on growth and investment until they have the funds available to make these changes. This can be difficult if their cashflow is used straight away to pay for materials, employees or your suppliers. One benefit of having Invoice Finance is that you can get access to cash upfront instead of waiting for your customers to pay you. This means you can concentrate on growing your business without fearing that cashflow gap.
So how can I ensure that I maintain a healthy cashflow?
There are several ways to improve your cashflow. You may focus on making yourself aware of your customer payment practices. It might be useful to establish how your customers pay and what the timescale will be to allow you to plan your monthly budget. One easy step could be changing the way your customers pay you and making it easier for them to do so. There are now many ways of paying online which might speed up the time that your customers pay. Another way to manage your cashflow is to plan your budget in detail. This can help you to spread the costs for each month and help you align your obligations with the time you are expected to be paid by your customers.
Another option is to let Invoice Finance do the work for you, leading to a healthy cashflow without the stress of managing it yourself. At Skipton Business Finance, we offer a range of solutions which can do this. With an Invoice Finance facility, you can gain access of up to 95% of your invoices immediately without having to wait 30, 60 or 90 days for your customers to pay. This means that your business can focus on growth, expansion or perhaps just maintaining a consistent workflow. With our flexible products, we can help you plug the cashflow gap and focus on building and creating new relationships and building your business.
Want to find out more?
If you are looking to find out more information about Invoice Finance from Skipton Business Finance, you can call us today on 0800 085 4150 where our friendly team will be happy to give you advice.