7 Ways to Increase Cash Flow Without New Clients

A company’s executives came across excessive cell phone bills, so they asked their manager to review the bills. Naturally, the first thing most people thought was that some employees may be abusing their cell phones to make personal calls. That wasn’t the case.

After doing a little detective work, the manager figured out that the high phone bills resulted from employees having different usage needs and working in different locations. One employee, a frequent traveler, racked up roaming charges whenever he traveled to another country. The company found a better plan to fit the employee’s usage and cut the bill by more than half.

By the time they finished the review, they saved more than $50k per month. What can you do with that much money?

The case of the web host provider

Another small business owner signed up for web hosting at the standard rate for the time when shared web hosting wasn’t as cheap as it is today. She discovered that prices had dropped, so she switched web hosts and saved over half of her web hosting bill.

That’s not all. Web hosting prices dropped again after she had been with the new provider for a few years. Without being asked, the web host provider lowered her rate. Most companies would only do that if asked.

Needless to say, the business owner stayed with the web host even when problems came up. She said they provided prompt customer service and often went the extra mile in helping her. It’s cheaper and easier to grow your business when you keep your clients happy. Doing this makes it harder for them to leave you.

You don’t have to switch web hosting providers to save money. In this case, the business owner chose to switch since she wasn’t happy with the original provider. If yours provides great customer service and meets all your web hosting needs, then just ask about lowering the price.

Your provider may be willing to negotiate instead of losing your business. When you meet with the provider, bring documentation showing competitors charging lower rates for comparable services.

When was the last time you reviewed all of your business expenses to see if you’re overpaying?

Where to find the money

As these stories show, businesses can find money without bringing in new customers. These little tweaks can boost your cash flow.

1. Check contracts

Like with the cell phone bill and web host provider, review your contracts and leases. Check competitors for cheaper rates, interest rates and plans that may better fit your company’s needs. Many products and services have gotten cheaper while tacking on more features.

Remember some companies grandfather your rate when you first sign up for their service. For example, you get to keep your lower rate while their new customers pay the newer, higher rates. A colleague started using a service before it became popular. Its prices went up and its features shrunk. But not for my friend because she was grandfathered on the old plan.

By the way, you can also use the opportunity to move off a grandfathered plan to your advantage. Another friend’s wireless provider wanted to get her off the grandfathered plan. And she wanted the newest phone without paying the higher rate. They gave her the phone for a low price and found a new plan that worked for her.

2. Offer more options

Do you accept online payments? Credit cards? You get your money faster when you provide customers with more options for paying you. These services may charge a flat rate or percentage, but you get the cash faster. For local businesses, you can offer to drive by to pick up payment.

3. Send invoices faster

When do you send invoices to customers? Right after you provide the service or product? Send the invoices as soon as you can or set up a schedule.

4. Entice customers to pay early

You can get the money faster even if you give your clients that standard 30- or 60-day period to pay you. Add a note on the invoice offering a discount to customers who pay by a certain date.

5. Deal with risky customers

Review your invoices for customers who consistently pay late or not at all. It may be time to fire the client. Wait. Don’t run off just yet. Talk to the client first. There could be a misunderstanding or a situation you may not know about.

You could also do the opposite of rewarding customers and impose a late payment penalty. Going forward with all new customers, you can run a credit check to avoid taking on customers with risky credit histories.

6. Get flexible financing

Cash flow management revolves around timing of the money flowing in and out of your business. You have bills to pay and sometimes the timing of when the customer can pay you comes too late for you to pay your bills.

A way around this is to work with a company that can provide flexible funding to get your cash faster. Not all flexible financing programs are equal. Some companies use this term when they mean something else.

7. Use part-time employees or consultants

Do you need to have a full-time accountant when you only need help in the first of the month or at tax time? You can also look into hiring a consultant to do the work on an as-needed basis rather than hire a part-timer. A consultant may charge more, but you’re not having to deal with the benefits and providing an office for the consultant to use.

You can even hire a consultant whose specialty is to help companies to find ways to cut costs as explained in Call in the cost-cutters. Employees may not be aware they could pay less for a product or a service. These consultants know where to look for savings. Besides that, employees may struggle to figure out what to cut knowing who or what those cuts will hit.

Where else can you dig up extra cash?

Photo credit: allie pasquier

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