Improving your liquidity in 6 steps
Your company’s liquidity is the basis for a healthy financial situation. That is why it is important to optimise your liquidity management. This already starts with the improvement of accounts receivable management, which is very important for the cash flow of your company. How to improve liquidity is then the question, to which the answer is simple by the way. In order to improve liquidity, there are six simple steps to follow. By applying these steps, you will provide optimal liquidity management in your company.
1. Determine an appropriate payment period
First of all, it is important to use an appropriate payment term when sending invoices. Most companies use a term of thirty days for this purpose. By setting an appropriate payment term, you get more certainty that the invoice will be paid within this period.
2. Send invoices on time
Why wait weeks before sending an invoice when an order has been completed? It is smart to send an invoice as soon as possible. If you wait a long time, the payment will arrive much later and that has a negative impact on the cash flow. Liquidity simply improves when payments are on your business account more quickly.
3. Clearly communicate the payment term
It is also important to clearly communicate the payment term. If there is no clarity about this, there is a chance that the debtor will leave the invoice unfinished. It is therefore advisable to include the payment term in the general terms and conditions or in the agreement and, of course, to state it on the invoice. If the buyer has certainty about the payment date of the invoice, it is easier for the debtor to act accordingly more quickly.
4. Make it easy to pay
Convenience serves man, but also companies, and therefore it is convenient to make it easy for debtors to pay. This is possible by offering several payment methods for the buyer to choose from. It is also practical to provide the debtor with the option of paying the invoice digitally. This contributes to faster payment. Payt provides in the field of payment methods and digital payment of an invoice in many possibilities.
5. Communicate well about outstanding invoices
Invoices of which the payment term has expired require action. If you use Payt, you will have immediate insight into the outstanding invoices. In addition, the software provides the possibility to automatically send reminders after the expiration of the payment term. In that respect, direct communication with the customer is possible and that also provides for a faster payment, which is, of course, good for the liquidity position.