Steps business can take to help manage cash flow

Payment terms

Establishing clear payment terms from the outset is crucial. If payment terms are not agreed, you do not know when you are going to be paid, it will be difficult to manage cash flow and you may face difficulties pursuing a debt.

If you do not have a set of terms and conditions, now may be the time to invest. Terms and conditions can set out payment dates, interest provisions and the consequences of non-payment.

Invoicing

Accurate and timely invoicing is crucial for cash flow management; if invoices are raised late or are incorrect this can lead to delayed payments which ultimately will affect cash flow.

Where possible, you should obtain a deposit or payment upfront from to increase capital and eliminate the risk of non-payment.

Invoices should be sent via email (as far as possible) to ensure that they are delivered immediately and to encourage quick payment. This is more important now than ever with businesses working from home and not having immediate access to post.

We would also recommend that you avoid accepting cheques as this will delay payment and will require a trip to the bank which may not be possible and in any event should be avoided in line with the government’s coronavirus guidance.