Tips for Managing Small Business Finances Part 4: Spread Out Invoicing

Developing smart financial habits for your business is one of the best gifts you can give yourself, and it’s never too late to refine them. 

As you continue to grow your business, managing your finances will be an essential component to your success so it pays to prioritize educating yourself on the basics and stay organized with your documents. 

In our recent posts we’ve outlined a few important places to focus when it comes to managing your small business finances: First, pay yourself. Second, invest in growth. And third, don’t be afraid of debt. Now we turn to cash flow.

Tip #4: Spread Out Invoicing

One of the best financial habits you can develop is to pay close attention to your books. You can’t plan for the future if you don’t know where you currently stand. 

To do so, establish regular meetings with your bookkeeper to monitor your cash flow. Where are you spending? What outstanding invoices need to be paid? Having a clear picture of what’s coming in and going out on a monthly basis is not only important for your bottom line, it also makes staying on top of tax payments easier. 

Having a clear picture of your cash flow will also impact your billing strategy. Maintaining a consistent stream of income is important to the ongoing operation of your business. 

If you find yourself dealing with a client who is consistently late paying their invoice, consider incenting good behavior, such as by offering a nominal discount if they pay their invoice within 10 days. Conversely, don’t be afraid to penalize late payments.

Moreover, depending on your client set, developing a strategy to spread out invoicing so you can count on a consistent cash flow from month-to-month can make managing your books easier and also offer insight into more reliably making future projections.