8 Strategies to Increase Your Small Business's Free Cash Flow

Here are proven strategies to boost your free cash flow. Read on!

1. Proactive Collections

Late customer payments cause serious cash flow problems. You might struggle to pay your own bills on time, miss out on growth opportunities, or worse. Even loyal customers sometimes need a gentle nudge, so consider sending invoices with multiple payment options for convenience.

With Thriday, you see unpaid invoices instantly, avoiding nasty surprises. You can also set up automatic reminders tailored to your customers (friendly nudge or firm deadline? You choose!). Not to mention that Thriday's payment gateway integrations make it super simple for customers to pay you.

2. Invoice Immediately

Every day you wait to send an invoice is a day you're not getting paid. This common pitfall can significantly disrupt your cash flow, making it harder to cover essential expenses. A streamlined invoicing process such as Thriday's Instant Invoicing lets you bill immediately, eliminating this needless delay in getting your money.

Pre-populated templates and automated invoicing save precious time. Bill the moment a job is complete or a product ships, turning your hard work into cash faster.

3. Don't Shy Away from Price Increases

As inflation surges, the cost of doing business rises, eroding your profitability and, in turn, your cash flow.  

That "if we raise prices, customers will leave" fear is understandable, but it's riskier to do nothing. Be transparent –  explain to customers why the increase is necessary.

Track your expenses precisely, getting the real-time data needed to make informed pricing adjustments and maintain healthy margins.

4. Inventory Efficiency

Too much inventory is money tied up needlessly. Too little inventory means angry customers and missed sales. Finding that sweet spot is key to healthy cash flow, and the wrong tools make it a nightmare.

5. Diversify Your Suppliers 

Recent global events exposed the vulnerability of relying on a single supplier. Disruptions can cripple your business! Multiple suppliers mean security –  if one falters, you have a backup! Plus, it gives you bargaining power for negotiating better prices.

6. Simplify and Strengthen Your Finances

Managing multiple debts with different interest rates and payment schedules is a major drain on cash flow and adds needless complexity. Consolidating those debts into a single loan with a lower interest rate can dramatically increase your cash availability and simplify your finances.

7. Master Your Payables

As late-paying customers hurt you, being the late payer damages your cash position. Missed discounts and penalties eat away at your bottom line.

Know exactly what's due and when. Avoid the scramble, preserve supplier goodwill, and always take advantage of those early payment discounts.

8. Know Your Cash Flow Statement

Making smart financial decisions without understanding your cash flow is like driving blindfolded. Cash flow statements show you the big picture.

Forget confusing spreadsheets! Thriday transforms raw data into easy-to-understand cash flow statements highlighting trends and potential trouble spots.

A Word of Wisdom

Small businesses often run on passion and sheer willpower. But to truly thrive, you need financial clarity. Thriday gives you the insights and control to turn your hard work into lasting success. Don't just survive the challenges; rise above them.

‍