1. Get Cash 24/7 with Seven-Day Settlements
If most of your sales occur on the weekend, then seven-day settlement can go some way to solving the headache of waiting for your weekend sales to reach your accounts.
Different banks offer different same-day settlements, which are not always available seven days a week. It’s important to find a product that best meets your needs.
2. Go Mobile
Banking apps that turn mobile devices into merchant terminals are now available from a number of banks and service providers. These generally involve some additional hardware for the phone or tablet in the form of a card reader, and some software from an app or website.
The advantage of this is you can accept payment on the spot, rather than sending out an invoice or waiting for a cheque to clear. And as Canstar business systems analyst Adam Beu points out, “If the clearing account is with the same institution as the merchant terminal, the money could clear that day.”
3. Streamline Your Accounts
Transferring money between financial institutions can take up to three days, and that’s dead time where you don’t have access to this money. By having a high-yield savings account with the same institution as your everyday business account, you can sweep money across instantly and it will start working for you faster.
Beu says that if you have a business loan, you should stash your cash in an offset account to help cut down on your interest charges. “An offset account is linked to a business mortgage account loan so it’s a good way to minimise interest. Just make sure it’s 100 per cent offset and look out for conditions which stipulate a minimum balance requirement before the offset kicks in,” he advises.
4. Set a Date and Make it Easy for Them to Pay
Simplifying your invoices by clearly stating your payment terms is a great tip for ensuring your customers pay on time. If you don’t detail credit terms on your invoices, then customers will likely make up their own and they’ll always pay suppliers who have put credit terms on their invoices before paying yours.
Consider reducing your terms, for example, having 14-day rather than 30-day terms, then give your customers plenty of options on how they can pay. These days there are a number of electronic payment options. BPAY, for example, can credit funds to your nominated transaction account on the same day.
5. Get Your Money to Work
Researching business saver accounts to ensure you’re getting the most competitive rates is a solid business practice for fostering your cash flow. Websites like Finder offer comparison tools to search all the major banks and service providers that offer business savings accounts.
Remember that because business owners tend to move large amounts of money in and out of their accounts as they manage their cash flows, the rates on offer are not as high as personal online savers.
But having said that, they’re an ideal place to put your BAS payments, as you earn a decent rate and have access to your funds 24/7.
Shop around, size doesn't matter:
It pays to shop around in order to secure a top rate on term deposits. Many small financial institutions offer very competitive deals and they are just as safe as the big players. All financial institutions that accept deposits must comply with the requirements of the Australian Prudential Regulation Authority (APRA), which are strict by world standards. In addition, the federal government guarantees the security of deposits up to $250,000 held with Australian-licensed banks, building societies, and credit unions.
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Originally published July 26th 2013. Updated July 31st 2019.