Client Receipts

The flow 🌊 of cash coming in your business from debtors and clients and then subsequently going out, paying invoices to creditors and paying overheads and wages, is called the working capital cycle 🎡.

We always want to have a positive working cash cycle 👨‍💼 to ensure that we are able to meet our commitments — our liabilities.

Here we look deeper at our client receipts — Debtors — to help set strategies to improve your business cash flow 🌊 and ensure you are getting the most out of your working capital cycle🎡.

🧾 Sales Invoice:

In a usual business, once we have completed works or delivered products 🧸 to our clients, we would then issue a sales invoice for them to pay.

This will be subject to payment terms agreed with your client before commencing. Ideally, we would like to seek 🎟 pre-payment before commencing the works to assist cash flow as best as possible.

⏱ Payment Terms:

Generally we would offer clients payment terms in order to assist their working capital cycle 🎡, very much in the same we would expect credit terms from our own supply chain.

The key with agreeing terms is to try to get these agreed with as few “days” as possible📆.

Days being the number of days credit you offer your clients.

The standard average payment terms are 3️⃣0️⃣ days, however an ideal scenario would be to agree 1️⃣4️⃣ days, or even immediate payment if possible.

👍 Positive Cash:

The key to operating a successful cash flow is to get money inwards — receipts — coming in as quick as possible 🏎, and then money outwards — payments — going out as far as possible🐌.

By maintaining a positive cash balance 📈, this will ensure that you have sufficient reserves to fund your business operations as your company starts to grow🌻.

If you need help with monitoring your business cash flow, let me know — I’d love to connect with you (and answer any questions you have getting started!).

Read this post and more on my Typeshare Social Blog