Cash flow in hospitality: Tips to keep the money coming in
For restaurant owners, caterers and hospitality suppliers, maintaining cash flow is fundamental to staying afloat. It’s a simple equation really: no cash = no business, so keeping on top of your cash flow has to be a top priority. Bartercard knows small business inside out, and in this article we share some tips on how you can maximise the most critical aspect of your business.
1. Invoice quickly
Sounds obvious but it’s amazing how many companies delay sending the invoice once they’ve completed a job. It should come as no surprise that if you don’t send your invoice until two weeks after you’ve completed the work, that payment isn’t forthcoming until another two weeks at least. Get in the habit of preparing and sending invoices straightaway. What’s more, email them to the relevant person immediately. And while you’re at it, make it easy for the customer to pay the invoice by providing your online banking details.
2. Use technology to help you track cash flow
Technology, especially cloud-based accounting, has made it much easier to manage cash flow. Investing in reliable accounting software will be a great time saver and will allow you to focus your energies on other important tasks. What’s more, saving your accounts to the cloud means that you won’t have to worry about backing up your data and you’ll be able to view your accounts at any time.
3. Focus on cash flow not profits
Many small businesses make the mistake of focusing too much on profit projections. The truth is if your cash flow is in order, then it follows on that your profit will also be in order. The opposite, however, isn’t true. Even profitable businesses need to have cash flowing through them to survive in the long term.
4. Use Bartercard
Bartercard is a valuable way to conserve cash flow by sourcing products and services without opening your wallet. Use your trade dollars instead of cash to pay for services like bookkeeping and accounting, renovations, advertising, website, graphic design and SEO. Source products like equipment and supplies, furniture and even wine. At Bartercard there are endless ways to conserve the cash flow essential in business - call 1300 227 837 to see how you can boost cash flow in business, every day.
5. Consider introducing incentives or fixed rate payment packages
If late payers are a big problem in your business, then another way to keep cash flowing is to introduce incentives for customers to pay on time. You could perhaps offer a deduction off the bill for full payment – whatever makes sense in your business. Alternatively, how about offering fixed rate payment packages? And so, if a client pays for a whole year’s worth of services or product upfront, they get one month free. This way you’ll be getting paid in advance rather than in arrears and the extra cash can help you explore opportunities and grow your business more easily.
Good cash flow management is critical to the success of your enterprise. Give your business the best possible chance by using these tips and keeping on top of cash flow.
January 18th 2018
