Unlock the Cash in Your Business

Female small business owner using laptop


If your business is facing a shortage of cash, the solution may be closer than you think. Take a closer look at your company’s stock, assets, and uncollected receivables to uncover hidden funds and tap into their potential.

1. Maximize the Value of Your Assets

Your assets, including debtors, stock, pre-paid expenses, vehicles, equipment, fittings and property, could hold the key to increasing your cash flow.

Unclaimed and unpaid receivables can be valuable sources of cash for your business. 
Here are some tips to expedite the collection process:
  • Send out invoices promptly. Your future cash flow depends on receiving payments as quickly as possible. Delayed invoicing means delayed payment. Avoid accumulating invoicing tasks until the end of the month; instead, invoice immediately after shipping goods or completing a task.
  • Embrace mobile payments. Implementing a way to accept payments through your mobile device can speed up the payment cycle.
  • Email invoices instead of mailing them. It’s faster, saves on printing and postage costs, and ensures your invoice enters the customer’s payment cycle earlier. 
  • Eliminate statements. Many businesses avoid the extra step of sending statements by printing a note at the bottom of the invoice. Example: “Please pay on this invoice as no statement will be sent.” Consider introducing this practice in your business.
  • Revise payment terms for some customers, or for new customers moving forward. Do you have the ability to reduce your payment terms from 30 days to 7 days from the date of the invoice? What about payment upon delivery?
  • Follow up promptly and consistently when invoices go unpaid past the due date. Be polite, but firm. If you don’t have the time to handle this yourself, consider appointing someone to do it for you.
  • Conduct credit checks on new customers. Credit checks can help you circumvent bad debt issues from the start. Ensure that new customers acknowledge and accept your credit terms.
  • Consider offering a discount for customers that pay early or on time. Evaluate whether the use of money gained earlier outweighs the discount you would be offering. 

Do you have excess capital tied up in stock? This can occur in two ways: 

  1. You’re holding high levels of inventory that you could easily obtain from suppliers at short notice.
  2. You have too many slow-moving stock items and too few fast-moving ones.
Better management practices can address both issues and unlock cash.
  • Regularly review your stock levels, turnover rates, and purchasing policies to determine if you can hold less in inventory without negatively affecting the business.
  • Consider holding a sale to convert old stock into cash quickly.
  • If you need additional funds to purchase more inventory, ensure that you're replacing slow-moving stock with faster-selling lines.

Fixed assets
Fixed assets can often tie up a significant amount of cash. Are you fully utilizing all of your assets? Examine whether there is an opportunity to sell off seldom-used assets in favor of renting or leasing vehicles and equipment when needed. 

2. Make Payments Easier for Customers

In addition to implementing the debt collection tactics discussed earlier, consider the following strategies to accelerate payments to your business.
  • Encourage customers to pay by credit card. While you may incur processing fees, you’ll receive cash immediately to use for your business.
  • Promote cash payments within your industry, keeping funds within your business rather than locked in accounts receivable.
  • Establish an ecommerce store and sell your products or services online. Doing so will provide a faster buying process and flexibility for your customers.
  • Consider structuring your payment terms so the business receives installments throughout the project. This ensures cash flow during a project, rather than waiting until the end of the project or delivery period to invoice–and then waiting another 30 days for payment. It can also provide a fail-safe if the project falls through.

Accept All the Ways Your Customers Prefer to Pay

Heartland offers innovative payment and point-of-sale solutions
to help you make payments easier for your customers.


Learn More 


3. Enhance Supplier Relationships

Lastly, consider your suppliers as a potential source of funds:
  • Discuss the possibility of returning surplus stock if you find that you’ve ordered too much for current trading conditions. If you explain that you’re facing a temporary cash flow shortage, they may assist you in resolving it.
  • Negotiate extended payment terms with suppliers to give you an opportunity to sell goods before making payment. 
  • Split orders with suppliers, offering to pay normal credit terms for half of the order and extended payment terms up to 90 days or longer for the other half. 
Suppliers are more likely to agree to these arrangements if you’ve consistently paid them promptly in the past. Maintaining good relationships with suppliers is key, as they may be more inclined to help you during challenging times.

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