5 ways to maximise construction cash flow when costs are rising
For any business, cash flow is one of the most important factors for ensuring success. In order to maintain a healthy business and expand your services, you need a positive cash flow.
This is even more important right now, at a time when the cost of supplies across the board continues to rise. Material prices increased by 25% last year and the outlook is still unclear for the future, so read on for five ways to maximise your construction cash flow.
1. Project future cash flow
To get the most out of your business, it can help to predict your future cash flow in order to have a better idea of what financial choices you need to make now. You can use cash flow management software to do this quickly and easily, eliminating future payment problems.
2. Spread out costs
If you need to make a large purchase, like equipment, it’s a good idea to use asset finance for these. This way, you can spread out the costs and make sure that your cash flow stays steady and predictable. This method also means you’ll have more cash to hand, which will help to keep your business running smoothly.
3. Look for the best prices
One way to reduce costs is by ordering common supplies in bulk. This is only possible if you have the storage facilities to handle it but is a great way to lower costs and protect against price rises. As well as this, simply letting suppliers know that you are considering other options can be a good way to prompt them to lower their prices. This way, you can reduce your expenditure.
4. Process change orders quickly
Change orders are critical in construction. If the details of a project change, including the time it will take, its costs and any resources, you need to complete the change order straight away. This means that money will be received sooner, which has a positive impact on the cash flow of your company.
5. Consider invoice finance
Cashflow finance, or invoice finance as it is widely known, can help you with making sure you get your money in fast! With invoice financing, you can get a large percentage of the value of your invoices quickly. This ensures you have no lengthy wait times from clients who pay late or have longer payment terms in place.
Where can I find out more?
Get in touch with our team for more information on our asset finance and invoice finance solutions or with any questions you have.