10 tips cashflow made easy
Cashflow is the lifeblood of any business and is so critical to its growth. Its all to do with timing and delays.
Here are Di’s 10 tips below for cashflow made easy:
- Keep your eye on the cash – do a cashflow forecast and compare it to actuals regularly to ensure you are tracking in the right direction.
- Always have separate business bank accounts for each of your businesses. Separating your personal and business accounts is essential.
- Having a robust terms of trade is really important for managing your cashflow.
- Invoice out for your services as soon as possible. This will ensure those all-important funds are coming in regularly. Set up easy pay options for paying immediately.
- Make sure you follow up on unpaid invoices – slow paying debtors are a killer to your cashflow.
- Review your payment terms, your terms do not need to be 20th of the month following. 7, 14 and 21 day terms are extremely common now.
- Ensure you are keeping track of all of your money in and out of your business – use technology to your advantage, it makes it a lot easier to see whats going on.
- Keep track of who you owe money to (creditors) and ensure you pay your accounts when they are due (not earlier). If you cannot pay your bill’s on time, ensure you talk to your suppliers and agree to a payment arrangement. This shows good faith to the people you are dealing with and will ensure future business relations continue. If you ignore the fact you owe them money, or don’t keep them informed, it will strain those relationships.
- Watch your stock (inventory) levels – carrying too much or outdated stock plays havoc with the cashflow.
- Know your breakeven point and focus on your cashflow, not your profits.