C S A H FOUR WAYS TO IMPROVE CASHFLOW Customers

Transcript:C S A H FOUR WAYS TO IMPROVE CASHFLOW Customers:
C S A H FOUR WAYS TO IMPROVE CASHFLOW Customers Collect money quicker Suppliers Cut or delay expenses Internally Improve your cash cycle Externally Improve External credibility Customers C A S H Offer discount for early payment – this is an incentive for customers to pay an invoice within a stipulated period Take deposit up front - Build trust. For your clients to be willing to give you an advance, you have to generate a lot of trust, especially if it is the first time they are going to work with you. ... Convey the value of your services. ... Set up a payment plan. ... Ask for the advance. Apply credit limit – Firstly, a risk limit for the new client must then be established. The risk limit is the maximum amount of credit that we are willing to risk with the client and that we will not exceed at any time without the authorization of a responsible manager. Thanks to the risk limits, high losses will be avoided if a default situation occurs. Set up a Direct Debit mandate – It is a way of processing payments that generates a wide range of benefits for your customers, benefits that add to the value and quality of service that you already offer them. It is easy to use 2. Save customers’ time 3. Eliminate the inconvenience of late payment 4. It is safe and protected by the Direct Debit Guarantee 5. Save your customers money Suppliers T Negotiate High Credit Limit Being able to agree High supplier credit is key It is cheaper than using the capital of the company. SMEs are be able to face larger orders and finance operating cycle invest to expand obtain discounts for early payment and, Last but not least, survival. Build good relationship Negotiate payment terms to 30 Days + This is a good strategy provided you can 1. obtain beneficial and stable conditions (in terms of quality, price and delivery times) 2. the greatest possible control over the payment periods. Supplier invoice factoring Invoice factoring is a very important source of financing for SMEs. A large part of SMEs sell on credit, and this limits their growth. SMEs have difficulty of obtaining credit from financial institutions, which only grant credit to companies that already have assets and an extensive history. 3 pillars on which supplier relationships are based Compatibility both at corporate