Improving cash flow is critical to the financial health of any business

As we approach 2025, it is a great time to take stock and make adjustments to enhance your business’ cash flow.
Megabus has put together the following list which it says offers eight simple yet effective strategies to help you get started.

1. Payment terms: entice earlier payments by offering varying payment terms. Consider offering a discount for payments made within seven days or COD (Cash on Delivery). Additionally, establishing long-term contracts with consistent revenue streams can allow for extended payment terms while maintaining steady cash flow.
2. Invoice promptly: send invoices immediately after completing the work. By delivering trade invoices electronically, you ensure they quickly reach the accounts payable team, speeding up payment processes.
3. Timely End-of-Month statements: since many businesses pay upon receiving a statement, make sure to send monthly statements on the last trading day. Email delivery is preferred and be sure to highlight any overdue amounts for quick reference.
4. Expand payment options: bank transfers aren’t the only option. Offering multiple ways to pay, such as easy-to-use credit card payment links, makes it more convenient for customers to settle their invoices.
5. Request deposits for special orders: for special or large orders, ask for an upfront deposit or offer instalment plans to help customers manage their cash flow while securing your revenue early.
6. Incentivise early payment: if your business can afford it, offer discounts for early payments. Settlement discounts can be a great incentive to speed up cash inflows.
7. Set credit limits: establishing credit limits should be paired with a formal credit application process. Ensure your business systems consistently enforce these limits to minimise risk.
8. Regular follow-ups on outstanding payments: keep a close eye on payments due in the coming week and follow up regularly. Weekly reviews of overdue accounts and keeping detailed debt collection notes in your system can help you stay on top of collections.

By adopting these strategies, Megabus says you can enhance your business’s liquidity and ensure it remains resilient through economic shifts, stating that now is the time to implement changes that will make a positive difference as you move toward a more prosperous 2025.

For more information, visit www.megabus.com.au