Small businesses in the professional services industry aren’t immune from cashflow challenges. Here are some tips to solve them.
You might assume that cashflow isn’t an issue for businesses in the professional services industry, such as lawyers, accountants and tax professionals. But while big global firms tend to be extremely profitable, the reality is that small businesses face many of the same financial challenges as those in other industries.
For instance, if you’re not vigilant about invoicing, it can lead to long payment times and a cashflow gap while you wait for your clients to settle their bill. This can make it difficult to run your business efficiently, or take on new clients, since you may not have the funds to cover your overheads.
At the same time, many small businesses in the professional services industry rent an office, so they may not have significant assets to offer as collateral. This can make it tricky to access traditional forms of finance unless they offer their personal assets, which can be risky. But with a buy now, pay later solution like hummpro, you don’t need to apply for a bank loan to gain access to finance.
Designed specifically for small businesses, hummpro is an interest-free credit option to help pay for the things you need to run your firm when your funds fall short. Here are a few tips to improve cashflow in the professional services industry, and how hummpro can help.
Send invoices ASAP
If you currently send invoices on a monthly or bi-monthly basis, you may want to consider switching to a rolling model, where you bill each customer as soon as you finish their work. This will ensure your payables are not going out faster than your receivables are coming in, which could lead to a cashflow crunch.
In addition, you could offer your clients the option to pay their bill with a BNPL app like hummpro, so you get paid upfront, and they have the flexibility to repay when it suits them.
Keep good records
Depending on your business, your billing may be based on the number of hours worked, rather than a flat rate, so it’s crucial that you and your staff keep good records of the tasks you perform every day. If not, it could delay your billing and potentially lead to time-consuming and costly disputes with clients.
Avoid delays at all costs
If a job hits a snag and starts to run over, it’s important to act quickly to prevent any cashflow issues. Since most clients won’t settle their bill until after their work is complete, you may need to cover your ongoing expenses for longer than anticipated. Focus on getting the job back on track, and if you’re concerned about cashflow, you can ask the client to make a partial payment.
How hummpro can help
Another way to improve your cashflow is by using hummpro to pay for everyday expenses, such as office supplies, software subscriptions, business travel, networking events and even lunch meetings with clients. This ensures you’ll always have the funds to meet your ongoing financial obligations like rent and payroll if a job hits a snag or a client is late paying their bill.
With hummpro, you have at least 30 days before you need to make a repayment, so you can buy the things you need without impacting your cashflow and know exactly when the funds will come out of your account. And unlike a credit card, you won’t accrue any interest for the transactions you make.
Don’t let cashflow issues slow down your business. Make sure your billing and project management are up to scratch, and use hummpro to pay for everyday expenses.