5 Different Strategies for Dealing With Short-Term Small Business Cashflow Problems

Cash running low and stress running high? Well, before you start picturing doomsday scenarios, let’s dive into five savvy strategies to navigate the choppy waters of small business short-term cash flow problems. 

Leveraging Credit Card Payments

Use credit cards strategically for benefits like extended payment terms and rewards. Payment platforms like RewardPay let you earn reward points on almost any transaction your business makes. 
RewardPay works by letting you pay your business expenses with your Amex credit card, even if Amex card payments aren’t accepted by your supplier. If you pair the RewardPay offering with a high-earning American Express card, you can earn up to 2 rewards points per dollar spent.

1. Harness Early Payment Incentives 

One slick move to tackle those pesky short-term cash flow hiccups is offering sweeteners for early payments from your customers. Think of it like giving a high-five in the form of a discount when they pay their invoices ahead of schedule.
This tactic can turbocharge the inflow of cash and keep things running smoothly. It’s sort of like putting a little pressure, but in the nicest way possible, on folks to settle up sooner rather than later.
 By doing this, you shield yourself from those awkward moments where you’re playing tag with overdue accounts – and we all know how much that game can sting for small businesses! 

2. Tap into Short-Term Financing Options 

Okay, let’s jump into another fix—unlocking the doors to short-term financing. When cash gets tight, hunting down a quick financial band-aid can be a game-changer. That could mean snagging a short-term loan or using a credit card to cover your immediate expenses.
For instance, this review of the AT&T Points Plus® credit card shows that you can get a sign-up bonus, a great rewards rate, and additional perks. So, it could be just what you’re looking for to deal with your cashflow issue.
Things like credit cards and short-term loans can bridge the gap fast and give you breathing room to get back on track without risking your neck (or business) in those cash-parched periods. Just be sure to shop around for the best rates so it doesn’t bite you later! 

3. Slice ‘n’ Dice Your Expenses 

Now let’s slice into a different strategy – cutting down on outflows. It’s time to whip out the scissors and trim some of the fat from your expenses. That can be anything from pausing less-critical services to renegotiating deals with suppliers for better terms.
Be like a cashflow ninja – swift and decisive cuts can free up funds quickly. Plus, getting leaner with your spending can actually beef up your business operations in the long run.

4. Maximize Payment Terms with Suppliers

It’s time to flip the script and talk about stretching your dollars. Negotiating longer payment terms with suppliers can be a real clutch move. It’s like hitting the snooze button on your bills—not forever, just long enough to get through a rough patch.
This isn’t about dodging responsibilities; it’s strategic timing. Convincing suppliers to grant you an extra 15 or 30 days can sync up outgoing cash with incoming revenue better.
 You’ll want this dance to be well-choreographed—keep those relationships solid, so it’s a win-win for both sides. It’s all about that sweet spot where you maintain good ties while managing your immediate cash needs effectively.

5. Embrace Invoice Factoring

Lastly, let’s talk about invoice factoring. This tactic is about turning unpaid invoices into instant cash by selling them off to a third party, known as a factor. It’s like having a financial wingman who fronts you the money while they wait for the original payment terms to play out.
You’ll typically get around 70-90% of the invoice value upfront, which can be a lifesaver when you’re in dire need of quick funds.
Sure, it comes with fees and you’ll net less in the end, but when your back is against the wall and cash needs to flow quickly, this move could be worth its weight in gold—or, rather, greenbacks.