Today’s blogging adventure covers a practical matter: cash flow.
What does this mean? Cash flow is the rate at which money comes in and is available for paying your bills. Your business can sink or swim depending on your ability to cover basic expenses: rent, power, internet, and other utilities or expenses.
The important thing to realize is that you need to keep money coming in regularly. One way to do that is to include payment terms on your invoices. “NET 30” is a standard I use, under which the net price of my invoice (less taxes or fees, if any applied) must be paid by my client within 30 days of receiving said invoice.
Another important way to ensure cash on hand is set aside a portion of every check in a savings account so that I will have money available as bills arrive.
A third tactic you can use to prevent payment shortfalls is to work with your utility providers or other creditors to set their billing due dates to occur at specific times of the month that coincide with your expected pay days.
In these ways, you can ensure that you will have the money you need at the time you need it.