Money in, money out.
Cash flow is what makes your business go ‘round. After all, without money coming in, how do you manage to keep things afloat?
It would be foolish to believe that you will always have to pay for things out of pocket; this is not how businesses work. Cash flow makes it possible to have a certain amount of money on rotation so you have the leeway to pay for things such as store rent, employee salaries, and stock up your inventory.
Manage cash flow properly with a few simple steps, all of which are possible for any small business owner.
1. Improve your Terms and Conditions Contract
Do you have a Terms and Conditions document as part of your ordering process? As a business owner, you want to protect yourself and your venture as well as provide assurance to your clients that you can give high-quality products and services. All of this can be put into writing.
When something like “best quality” or “service you can trust” is tangible, you earn a client’s trust in the process.
Here’s how you can draft a document that not only markets your business properly but also helps prevent client debt from accumulating.
2. How to Write Terms and Conditions?
Drafting one is easy, but will need to be checked by a legal professional before you can release it to clients.
The main reason is that this document is legally binding — anything that is stated there can be brought to a court of law and can be used against you or the other party. You have to make sure that the terms and conditions stated are still within your and your client’s legal rights.
Don’t be scared to write one up though – you can start now so you can also decide terms and conditions that are beneficial to you and your business.
Keep it simple
This document may sound like it’s supposed to be long and drawn out but it shouldn’t be. Make it as simple as possible, and there’s no need for you to use big words to try to impress the client.
Simple terms and easy-to-understand conditions are your best bet. Clients want a document they can comprehend right from the start. People find it embarrassing to be asking for clarification. Avoid this from happening with a simple contract.
You can use this document as a way to market your business too with how simple it is. Remember that presenting this document is still in the early stages of a transaction; if the client sees something they don’t agree with, they may not push through at all. If they see that the document looks “complicated”, they will get the impression that your business is also complicated to deal with.
As you can see, every detail of your business should be given proper consideration and the terms and conditions contract is no exception.
Explain properly
There are many sections to a terms and conditions document and each one requires you to be concise. When you explain everything in detail, there is little left for the client to ask or understand. This makes you and your business seem like they can trust you since everything is already in writing.
If you need to use terms that are unique to your specialized field, have a separate section that explains each term.
3. Double-Check Your Transaction Process
Look at how you transact with clients and see where you fall short. There might be a step or two that can be improved and changed altogether.
For example, you might be sending out invoices late. This could be a reason why your cash flow is negatively affected.
Do you follow up on unpaid invoices? How often do you do this? If you are inconsistent, chances are the client might have forgotten about paying off their debt. It would be wise to impose a late fee for every week or day that passes after their payment is due. Include this in your terms and conditions contract so that the client is aware of it and won’t be tagged as “hidden charges”.
4. Check Your Stocks
Sometimes your cash flow is also affected by your own doing – you might have overstocked on items that are not fast-moving. This makes your working budget considerably less since it isn’t being sold as quickly as you want it to.
Avoid this in the future by studying the market before making any big purchases. If you want to take the risk, order a conservative amount first. It won’t be as risky on your end.
Read More: Tips for Handling Your Business Cash Flow
The Takeaway
As a business owner, whether it’s a small venture or a medium-sized company, the processes are still the same. You want to be able to provide products and services to the general public while still making a profit. These tips and more are just some of the basic steps you can undertake to make sure that cash flow is never an issue. Visit www.jmacreditcontrol.com.au for more valuable insights.
