Small businesses often suffer from uneven cash flow, or “lumpy money” syndrome. But there are some steps you can take to smooth out your cash flow.
Don’t be afraid to ask for cash up front. A retainer or a down payment at the start of an order can give you the funds you need to operate smoothly.
Check out your customers carefully when you extend credit. Background and credit checks might not uncover potential problems if someone’s operating under a new name, so check their reputation online and with industry contacts too.
Accepting credit cards may cost you a processing fee, but it can beat waiting for the billing and payment cycle.
An automated accounting and invoicing system can take a lot of hassle out of invoicing and bill collecting.
And finally, if you have to tap your credit cards – as many startups do at some point – make sure it’s at least one that gives you rewards that can help your business.
Adapted from 5 Tips for a Smoother Small Business Cash Flow by Joe Taylor Jr. at Small Business Computing.