5 ways to help address a cash flow crunch

1Offer buy now, pay later options for customers

It’s not just big-box retailers who can offer their customers financing. With pay later options, you can too. Pay later options allow your customers more flexibility in how they shop, while you get paid upfront.

For example, PayPal Pay in 4¹ is a short-term solution that lets your customers break up the cost of a smaller purchase into four payments. For bigger purchases, customers can use Pay Monthly² as a longer-term payment solution to spread the cost further over 6, 12 or 24 months. Offering this flexibility can help lead to boosted sales and increased order size.

2Get more of your customers over the checkout hump

You can help make a difference in your checkout completion rate with a few simple tweaks:

• Present shoppers with their preferred payment options.
• Reduce steps at checkout, especially in the number of form fields.
• Display security icons next to your Buy Now button.
• Of course, you’ll still have customers who abandon their carts, so be sure to send them a reminder email. If it makes sense, add an incentive.

3Switch to digital invoicing

Even in this digital age, businesses still use paper-based invoicing to bill their clients or customers. But you know how snail mail is. Weeks or months can pass between the time you send your invoice and the time you see the funds in your account. There’s a faster way: digital (or electronic) invoicing. Not only do you save on postal costs, you’ll also save time since you can send out invoices immediately.

4Change invoicing payment terms to speed up payment

While Net 30 is the most common invoice payment term, it’s not etched in stone. The 2/10 Net 30 might increase your cash flow. A 2/10 Net 30 payment term gives your customers a choice. It tells them that even though the invoice is due in 30 days, they’ll get a 2% early payment discount if they pay it in ten days. If a 2% discount feels steep, you can always start with a 1% discount.

5Find out how to access your funds more quickly

Your bank may place a hold or reserve on your funds. That means your money is temporarily unavailable to you. This usually happens with new accounts, large or out-of-state checks, and big deposits. Banks do this to make sure funds arrive before they’re available in your account.

In the past, there wasn’t much you could do about this. But today, banks are coming up with programs to help you get to your money faster. Ask your bank or payment processor.

While cash flow crunches are a part of life for most small businesses, there are smart steps you can take to help alleviate them. Look at every possible short-term strategy so you can bridge the gap between the ebb and flow of your cash cycle. Maybe you can’t eliminate crunches – but you can find ways to manage them better.