What do we like to talk about on Thursday? Company financials! The seminar went great yesterday, and not surprisingly one of the main topics was cash flow management. Managing you cash flow is way more than just calling on clients with past due invoices. It is also more than just receiving money. Paying bills and developing a good reputation is part of your cash flow management as well. Increase your buying power, influence, and overall success by making cash flow management a priority!
We have discussed the past the importance of starting the invoicing procedure before the job has even began. Contracts and estimates should spell out clearly the payment terms and include deposit and progress payments if applicable. This will help maintain a steady flow of cash to cover expenses and overhead throughout the project. You should be reviewing your in progress jobs on a weekly basis to ensure that your billings and expenses are inline with each other.
Also make sure your invoices and clear and easy to understand. When something is difficult or confusing, people tend to push it off. If your invoices are confusing, and you don’t provide an easy way to accept payment you can expect it take longer to receive payment. Many companies offer ACH and credit card payments. Make it easy and get paid faster.
Paying your bills on time is also a big part of cash flow management. Want to increase your buying power and influence? Want to attract reliable subcontractors who do their work on time and at a high level? Pay your bills on time! Your ability to negotiate better pricing will improve, and who is the subcontractor more likely to help in a pinch when something comes up – the person who pays their bills on time or the person they have to constantly chase down and beg for payments?
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