Maintaining cashflow in the current climate: Things you can do right now to help your business

With the uncertainty surrounding COVID-19, many business owners may feel like they’re stuck in a waiting game. But there are things you can do right now to help your business maintain much needed cashflow:

Get paid on-time - use online invoicing

A digital invoicing solution saves you time and money, with no postal costs you can send invoices as soon as you finish the job. More importantly, online invoicing can help customers pay faster with online payment options. [1]

Set payment terms that encourage early payments

Although net 30 days may be the most common invoice payment term, as the UK Government’s business advice notes, it’s not your only option. You can set your own payment terms, and incentivise customers with discounts for early payment and payment upfront.

If, for example, an invoice is due to be paid in 30 days but you offer your customer a 2% early payment discount if they pay the invoice in ten days the 2% reduction in income may be outweighed by the benefits of being paid 20 days early. While 2% may be a commonly used discount, you have flexibility to make your own terms. If a 2% discount feels steep, you can lower it to 1%. If you’re really trying to incentivise a customer to pay early, you may want to consider raising it to 3%.

Similary, you can add a late payment penalty for invoices not paid on time.  And make it someone’s responsibility to chase payment when due.

Can you adapt your business model or open new sales channels?

For those businesses who make most of their sales offline you might want to explore whether it is appropriate to launch or increase your sales online. See our article on selling online.

Can you streamline your business processes?

It’s always difficult to find the time to review your working practices and list of suppliers.  It’s always good practice to do this regularly to ensure you are maximising your resources and mininising your costs.

Make payments at the right time

Maximise your cash flow by paying your suppliers and expenses at the right time. If a supplier offers a discount  for early repayment it may be advantageous to do so.  Not paying too early could also provide you with extra funds until they are needed.

Small business loans

If you’ve not currently got a business loan now may be the time to consider one.  There are lots of options including the governments  Coronavirus Business Interruption Loan Scheme (CBILS).  Make sure you read the terms and conditions and understand all of the fees to get the right funding for you and your business. There are other schemes set up by the UK Government, so be sure to check out all your options.

If you already have a small business loan you may be able to apply for a payment holiday or work with your lender to see if you can reduce the rate of interest currently charged.

Cash back business credit cards

Many credit cards can offer low introductory rates for new card holders. If you’ve been using the same business credit card for more than a year, it is possible that you may be paying a comparatively high interest rate. Depending on your current balance, you may be able  to switch to a  new card that also offers free balance transfers for a limited time. Just make sure you know when any introductory offer expires, because that’s when you’ll start paying higher interest rates.

Redeem your rewards

If you’ve been using a credit card that gives you cash back or rewards, this might be a good time to redeem them. You may be able to  use cashback rewards to pay down part of your balance or choose to receive the cash so you can put it towards other expenses. Redeeming points may vary between credit card companies, so review the terms of your card to make sure you get the maximum value.

These are just a few things you can do right now to help give you better control of your cashflow. Keep checking back for additional resources dedicated to helping small business owners navigate the current climate.

The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.


[1] Based on PayPal’s analysis of internal data of all PayPal and PayPal Invoicing active customers and volume from December 2018 – November 2019.

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