I’ve seen a lot during the last decade I’ve worked as an accountant serving 6-7 figure small businesses from all over California. I’ve seen egregious mistakes to the swiftest of successes. I know what works and I know what doesn’t. So I thought I should share them with y’all! Here are four MAJOR KEYS I’ve compiled over the years that businesses must do FIRST to solve the cash flow blues.
1: Reduce How Long it Takes to get Paid
Chasing down late payers can be costly. Believe me, I know. The extra time and steps needed to follow up with a customer can feel like it’s not worth it, especially when it’s your hard earned money to begin with! 👊
To fix this – make it as easy as possible for clients to pay you by incorporating a variety of payment options through email or online payment vendors. Set up automated reminders and offer incentives to clients who pay earlier than when the work is to be performed. For instance, back in January, I offered my clients a 10% discount if they pre-paid for tax return services. Not only did this help me identify my more loyal clients, but it also helped my clients get into the mindset of gathering tax documents earlier rather than waiting until the last minute. Win-win! . And remember, there is nothing wrong with formalizing the process, that’s how clients know you mean business!
And make a note of folks who give you a hard time to pay you so you can reject them for services again the next time they swing your way.
2: Raise Your Prices
You may be hesitant to raise your prices, especially because you’d think clients wouldn’t want to pay more for the same thing especially for commodity services or goods. But consider this: if you’ve been working with a client for a long time, they probably really like your service. The time you took to build a rapport with them is worth the extra money – clients will know they can’t get your personalized service anywhere else. That value-add means something and it costs $$$ so charge accordingly.
3: Transition to Retainer Contracts
If you have clients you’ve been working with for a while, it might be time to switch up the terms. Retainer contracts gives you consistent work and income.
I did this recently with my top-paying clients. Instead of offering accounting services during certain parts of the year, I market myself as a retainer accountant for top-tier clients. By doing this, I reduced my work load, increased my revenue and decreased my stress all in one move. Take it a step further by incorporating automated monthly billing so the cash can flow through quietly in the background. 😉
4: Stay On Top Of Your Cash Flow
This might be the most important point. You can’t fix cash flow problems without knowing what the hell is going on!
Stay organized, keep track of outstanding invoices, and dedicate time each week to analyze what is coming in and going out. This is the only way you’ll be able to know if there are any problems in the first place. You’ll know if you’re spending too much or not enough, how to budget for big purchase items and how to set realistic goals.
Even if you’re satisfied with your cash flow, you should always consistently keep a watchful eye on everything on a monthly basis. You are the boss after all. 💪🏾
To more money in our pockets,