For VSEs and SMEs, improve cash flow is often the key to serene growth. Cash flow is more than just a financial indicator: it is the engine of growth. A SMEs in control of their cash flow can invest, recruit and anticipate its needs without relying solely on sales growth.
Many managers focus their efforts on increasing sales. Before seeking to increase sales, it is often more effective to improve your SME's cash flow by better management of collections. Here are the concrete levers to activate today.
1. Speed up collections to improving SME cash flow
Invoice without delay
Every day between the end of a service and the issue of the invoice delays your collection.
Adopt a simple rule: invoice at the end of the assignment or in stages for long-term contracts.
Requesting advance payments
An advance payment of 30 to 50 % secures the commercial relationship and limits cash advances. This is a sound practice, especially in the service sector.
Follow up your customers effectively
Structured and even automated reminders significantly improve payment times:
- First reminder before the deadline,
- Follow-up on D-day,
- Personalised follow-up after 7 days,
- And, if necessary, recourse to a debt collection agency.
Thanks to our Pennylane collaborative platform, available to our customers, reminders can be automated.
The tool can be used to programme personalised reminders, track payments in real time and simplify communication with customers.
A real saving time and improving efficiency in day-to-day management.
2. Optimising cash outflows for a stronger cash position
Negotiating supplier lead times
Even a few days gained can make a difference. Cash before you pay It's a golden rule.
Plan your expenditure
Postpone non-essential purchases and prioritise those that directly support your business.
A planned vision avoids unnecessary tension.
Leasing rather than cash purchase
Leasing or financial leasing allows you to preserve cash flow and optimise taxation, including equipment and vehicles.
3. Control inventory to improve your company's cash flow
Too much stock means tied-up cash. To optimise it :
- Analyse the stock rotation,
- Identify low-selling references,
- Keep an eye on recurrent breaks.
A rigorous inventory management often frees up several weeks' cash flow without impacting sales.
4. Manage your cash flow using connected tools
The projected cash flow statement
Whether monthly or weekly, it must anticipate :
- Expected receipts,
- Planned expenditure,
- Tax and social security charges,
- Seasonal variations.
With Pennylane, our customers have a cash flow forecast connected to their bank account.
Feeds are automatically updated, offering a clear, reliable view in real time financial situation.
Stress scenarios
Simulate different scenarios (late payments, drop in activity, increase in charges) to anticipate and take action before the pressure builds up.
These tools give you a clear, responsive vision your financial situation.
5. Financing your growth while preserving cash flow
There are several options for one-off requirements:
- Digital factoring, to collect your invoices immediately,
- Bank overdraft facility, to cover a temporary gap,
- Loans Bpifrance or repayable advances, to strengthen your working capital.
The secret? Don't wait until you're in difficulty to ask for these solutions.
In conclusion
Improving cash flow is not just a question of sales: it is first and foremost a question of a question of method and management.
Managers of VSEs and SMEs who adopt a proactive management approach gain in peace of mind, in agility and in ability to invest at the right time.
Would you like to go further?
At Novalliance, We support managers in implementing management and steering tools tailored to the size of their company.
Thanks to our partnership with Pennylane, We offer collaborative solutions to automate customer reminders, monitor cash flow and anticipate financial needs.
Contact us for a personalised diagnosis of your cash flow and the implementation of a concrete action plan.
