Proper cash flow management is a big deal for small- to medium-sized business owners in order to keep their businesses prosperous and revenue strong. With the recent economic changes including multiple tech layoffs and increased interest rates, more than one in 10 U.S. SMBs show concern that their business may not survive to see 2024.
If you’re worried about cash flow management, the first step is to drive down the hefty payment process costs that come with working in the oil and propane industry. If you need help driving payment processing costs down, treat yourself to professional consulting help this year. My business, Richmond Financial Services, helps customers take control of their payment processing costs and enjoy perpetual savings. I also help customers understand their payment data by offering data portability and control services. Schedule a free consultation session by clicking here or calling 617.843.5700. For now, follow these tips on how SMBs can better manage their cash flow:
Understand the benefit of technical partnerships
One of the best ways to facilitate faster payments is to partner with new solutions. B2B payments that are received within 30 days increase SMBs’ cash flow by 66% while payment within 60 days increases cash flow by only 10%, according to the latest PYMNTS report.
When business owners invest in technology they are also more likely to create initiatives that help the win new customers and improve collaboration efforts for customers, suppliers and business partners. Be sure to conduct thorough research before finding the right technology partner and consult with trusted friends and colleagues.
Check collaboration for all AP/AR tools
Some companies rely on one person for managing AP and AR processes, which leaves room for a larger margin of error. In order to make AP/AR tools more efficient, there must be a more collaborative approach where these systems regularly communicate with each other.
If you do have one person in charge of all AP and AR processes, avoid a cashflow incident by training multiple people in case that person leaves the job.
Increase customer retention rates
Of 2,000 business owners surveyed by Payments Journal, 49% stated they were either concerned or very concerned about customer retention. This was the top concern stated above cash flow and employee retention.
SMBs increase customer retention by investing in strong CRM software, personalizing all forms of customer communication and adapting to digital trends. If you’re looking to connect with new Millennial and Gen Z customers, you may want to start leveraging social media platforms like Instagram and TikTok as well.
