It can be a scary moment when you realise the number of customers or sub-contracting jobs that still have not paid you.
But it is no wonder tradespeople run out of time to spend tracking cash flow when demands like quoting for new business, buying supplies and getting jobs finished to specification - are calling.
If cash flow is impacting your business, here 4 cash flow hacks to improve the health and success of your business.
Invoice Without Delay
Getting paid on time can be a challenge for many trade professionals, however, invoicing quickly and payment reminders can make a big difference to your monthly revenue and expenses.
When quoting and delivering larger jobs, deposits and staged payment plans are often the norms. Be sure that you have set clear payment terms and outlined the scope of the work in advance.
Remove uncertainty and stress of chasing customer payments with Onlinetradesmen's NEW TradeyPay Escrow platform. Get maximum payment protection and confidence for any job that you deliver - big or small. Learn more here.
Initiating customer sign-off at project milestones and sending invoices outlining what you are charging for as soon as you have fulfilled the terms of your agreement can also help avoid late payments.
TOP TIP: Set payment due dates clearly on your invoice
Offer Customer Payments Options
You can boost faster customer payments by offering a variety of transaction options like direct deposits, BPAY, credit card & PayPal.
Onlinetradesmen members can get paid instantly for their work in full or in stages through our TradeyPay service that accepts payment from any card type. Members can also use the service to collect money from any customer, whether they found them through Onlinetradesmen or direct.
In a recent Onlinetradesmen Outlook Survey our members were asked what their biggest business challenges are in 2021. The good news is that the difficulty in collecting payment from customers did not rank as an issue! Read here what tradesmen say about Onlinetradesmen.
When customers have more choice and flexibility to pay securely, you’ll find that they have fewer reasons to delay payments.
TOP TIP: Make sure you let customers know what secure payments options you accept.
Reduce Business Costs
Everyday expenses such as fuel and materials can be a drain on cash flow, so finding the best prices and discounts is sure to help.
A chat with your suppliers about longer payment options as well as discounts for regular purchases and returns for unused materials can ease cash flow woes.
Always shop around for the best van and public liability insurance premiums and invest in protecting your tools from theft.
At Onlinetradesmen, we’ve made it easier for our members to save money on fuel, tools, materials, insurance and even provide a cost-effective way to quote for jobs via our service. To discover more about how Onlinetradesmen can help improve your cash flow and reduce your business costs, submit your details here and a team member will be in touch.
Automate Where Possible
We know there are never enough hours in the day – but taking time to review your business expenses and overall financial position is time well spent.
Once a month, check if any direct debits need review or outstanding invoices that need chasing.
Many free and low-cost software applications can help take the pain out of managing your cash flow including automatic invoice chasers and alerts when payments are due.
Some apps also offer money management options that allow you to link accounts to move money each time you receive a deposit – a handy solution for parking or saving cash automatically!
Banks and financial institutions are more likely to extend lines of credit or loans while you can demonstrate good financial health. So, before any cash-flow problems hit, have an available line of credit like a bank overdraft or a term loan.
Financing options such as lines of credit, short-term loans or credit cards are best used for short-term cash needs, but once you have credit available to you, use it wisely.
TOP TIP: When seeking financing, don’t forget to investigate any special lending programs for which your business may qualify such as the Covid-19 Credit Guarantee Scheme (CCGS) for SME and mid-cap businesses who have been impacted by the pandemic. Loans under this Scheme range from €10,000 to €1 million, for terms of up to five-and-a-half years.