There are many definitions of ‘cash flow’ when running a business but generally speaking it is the amount of money coming in and out of your business (hence the term flow) generated by your company’s core business activities.
It is very important to have adequate positive cash flow in your business because, without it, you won’t have the money to keep your business fully functioning.
This is because among other things:
Staff have to be paid
You need to have cash for day-to-day operational costs
You need to pay suppliers
You need to make a profit for your business to prosper
In the worst-case scenario, not having adequate cash flow could even result in you going bust and losing everything! In fact, lack of cash is one of the main reasons why many small businesses fail. This is why keeping on top of your finances is business-critical.
Poor cash flow not only puts an immediate strain on the day-to-day running of your business but has a knock-on effect on your suppliers. This creates even more challenges and can seriously damage your reputation (which can be just as costly as bad debt!).
IMPORTANT: It's entirely possible for your business to be in profit, but to have little to no cash available. This is because profit is an accounting concept, while cash is the amount actually in the business that you can access. Accounts receivable is the money owed to you but if you can't collect on it – it won’t help you run your business.
This is why cash flow is king when it comes to running a healthy business.
Imagine then for a moment if…
- You could effectively incentivise customers to be punctual payers.
- You could better manage cash flow to invest in improvements and still be in profit.
- Your business reputation soared because you can now pay ALL your bills on time!
Get Paid Faster, our easy-to-use invoice and debt reporting system, allows you to not only manage and monitor your invoices and debt owed to you but encourages your customers to always pay on time – thus enhancing your cash flow.
You can upload all your unpaid invoices (and other forms of debt, i.e. contracts, lease agreements etc.) and schedule automatic payment alerts to remind and encourage your customers to pay on time.
But that's not all!
You also have the option to report very late payments to CreditRegistry, Nigeria’s largest credit bureau. Reporting debt defaulters and late payments to CreditRegistry means that there are serious consequences for debtors who do not pay you on time or pay you at all.
By reporting past-due debts, you prevent customers who still owe you from getting services or loans elsewhere until you get paid. Other businesses alert you, through CreditRegistry reporting, so that you can avoid problematic or financially difficult customers. This collaboration holds bad debtors accountable and helps your business and your industry.
This is an extremely effective deterrent for repeat late payers and debt defaulters! Getting paid on time means you can grow faster and have more cash to invest to make your business even better.
Help maintain a positive cash flow with Get Paid Faster.