Tips for keeping tabs on your cash
Whether you’re a new startup or an established business that’s trying to build and grow, knowing how to manage your cash flow is key to your success. You’ll always need a little cash on hand to stay afloat, or you risk going under! Think of your business like a sponge – it soaks up lots of cash, and to get it out you need to give it a squeeze every now and then.
Here’s 10 ways to keep your business cash flowing
Improving your business cash flow is all about controlling your expenses and increasing your profits.
1. Know we’re you’re at
- It’s essential you keep tabs on your cash flow at all times. Using a cash flow statement will help you keep track.
- This will list all of your incomings and outgoings and help you to make sure you’ve got enough cash on hand to stay afloat.
2. Book keeping basics
- Ensure you’re invoicing customers effectively.
- Raise invoices daily or at least several times a week – the longer you wait before invoicing your customers, the longer you’re waiting to get paid!
3. Get your cash faster
- Make it as easy as possible for your customers to pay you – they don’t need any more excuses for missing payments!
- Ensure your invoices provide your bank account details. Offering options including direct deposit, EFTPOS, credit card, PayPal or even automated payments boost your chances of being paid sooner.
- You could even consider offering an early payment discount – the sooner you get your cash, the better!
4. And dish you cash out slower!
- Don’t be too quick to hand over your precious business cash.
- Extend payment terms with your suppliers to the longest possible – aim to give yourself time to be paid by your customers before you have to pay your suppliers.
5. Manage your debtors
- Set aside time each week to chase up overdue payments.
- Customers who haven’t paid their bills are keep precious cash out of your business coffers!
6. Embrace technology
- Using cloud-based accounting software means you can access your business finances anywhere, anytime, and keeps them secure.
- Use the cash flow statement and tracking options your software provides.
- Handy options like invoice reminders that automatically email reminder invoices to customers can work to keep cash coming in.
7. Boost sales
- Consider some creative ways to promote your business, gain new customers and boost sales.
- These could include offering referral rewards to existing customers, using social media or sponsoring a charity or community event.
8. Cut your costs
- Review every area of your business and identify any procedures or people who aren’t saving or making you money.
- Review your suppliers and the rates they’re offering you – ask for a better deal!
- Consider ditching any products or services that just aren’t making you enough money or adding enough value.
9. Monitor your stock levels
- Not only does holding too much stock cost you more in inventory, but it increases your storage and insurance costs.
- Use good stock control processes to maximise your cost and space efficiencies.
10. Improve your financial know-how
- Make sure you understand the basics of your business finances.
- Improving your management and financial skills can help you improve your cash flow.
Using these tips will help you to better manage your business cash flow, understand how you can improve the efficiency of your business – and boost your profits.