A Dozen Ways to Keep Your Cash Flowing


A Dozen Ways to Keep Your Cash Flowing

Nothing saps the life out of business owners like cash flow issues. It’s a common problem that often leaves good businesses struggling, so here are a handful of ideas to avoid late payment.

Issue invoices.

This might sound obvious, but I used a service last year that took seven months to send me an $800 invoice. I had the funds set aside and sent a couple of reminder emails, with no response. After another enquiry (to make sure they had my correct details), I learned that the owner of the business didn’t like paperwork. Not surprisingly, I also discovered that his business wasn’t doing well.

If paperwork isn’t your thing, outsource it, systemise it or have someone make up a template so you can just fill in the numbers. But whatever you do, issue your invoices as soon as the work is done. Delays in invoicing sends a message that you’re also ok with delays in payment.

Terms and conditions.

In your terms and conditions, service contracts or any paperwork you exchange with clients before undertaking work for them, make sure you spell out:

  • Your payment terms (COD, 7 Days, 30 Days, etc.).
  • The interest or late fees you’ll charge on overdue invoices.
  • That all legal fees and costs to pursue outstanding debts will be added.

And don’t be afraid to point these out in conversation to get a verbal acknowledgement as well.

Clear payment terms.

Make sure your payment terms, methods and account details are clearly displayed on your invoices.


Have a system for following up late invoices that kicks in as soon as debts are past due. The first need only be a friendly prompt; keeping in mind that your invoice might genuinely have been overlooked or the cheque may, in fact, be in the mail. Each subsequent reminder should become firmer with the final one stating that the matter will be passed on to your solicitor or collections department, and a reminder that those legal costs will be added to the outstanding sum.

Personal contact.

Make a point of talking to your good customers and those with the largest outstanding debt. If they are generally reliable clients, consider asking them, “What’s happening?” or “What’s changed?” Perhaps offer instalments to clear the outstanding invoices, providing all future invoices are paid on time.

Payment methods.

Offer a range of payment methods like direct debit, bank transfers, BPAY, PayPal, credit cards, business cheques or good old cash. Customers who use a particular method to pay most of their bills will find it easier to just add yours to that list.


Make sure the full amount of the invoice is clear and then in smaller writing offer a discount to invoices paid within 7 days.


Take deposits or factor in instalments throughout larger (or longer) jobs. People usually appreciate that a deposit will secure their job in the queue, but if you’re a bit shy about asking for instalments consider giving clients the option to pay in advance at a small reduction in price, or by instalment. Suddenly instalments seem like a great option.

Expand your client base.

If 2 out of 200 customers are regularly late, chances are pretty good you can work around it. But if 2 out of 3 clients have you chasing them for money, that can significantly undermine your ability to meet your own financial obligations. Do what you can to expand your client base.

Add products.

It won’t suit every industry, but consider adding a product or service to your range that’s paid for immediately. The profit margin may not be as high, but a bunch of smaller sales can bring relief in dry times.


Offer incentives to customers who consistently pay on time. Perhaps they each receive a discount on services booked in January or a voucher for office supplies. You could also put them in a draw for a larger reward drawn at the end of the financial year. These needn’t be extravagant, but when you consider the cost of chasing unpaid invoices, the incentives may pay for themselves.

Say goodbye.

This is a tough call, but if you work in an industry that involves a considerable outlay to provide your services, it may be better to refuse repeat business to a client who consistently pays late. Sometimes the risk that your suppliers can’t be paid just isn’t worth it.

If you have tips that have worked for you, share them in the comments section below. Late payments are sadly a part of business life, but with a bit of planning, you may be able to make them the exception, rather than the rule.

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