If cash is king in business, then cashflow is queen.
Cashflow is the amount of money that goes in and out of your company. It includes payables, receivables, operating expenses, and other financing activities.
For continuous business growth, make sure to manage your cashflow properly.
How do you do it? Here are some tips.
1. Always update your books
As they say, “you can’t manage what you don’t measure.”
While some see bookkeeping as a monotonous, boring task, it’s an essential part of a company’s financial process. It allows you to collect data that would help you make sound business decisions in the future. Furthermore, accurate bookkeeping makes you more confident in managing your cashflow as you have up-to-date records to back you up.
2. Monitor payments and invoices
Late payments could throw your working budget off track. Make sure your clients pay for your products or services on time. Additionally, always settle debts with your suppliers on or before their due dates.
Are you having a difficult time tracking and following up on invoices? Think about using a bookkeeping app or software that lets you set invoice reminders.
3. Keep your financial processes as simple as possible
You could do bookkeeping, accounting, and cashflow management in many ways. When setting up your processes, remember that the less complicated the process is, the more you’re likely to stick with it.
4. Make technology your best friend
Your time is precious. Make sure you are using it efficiently. To do that, consider integrating the latest technology into your business.
For instance, you could automate specific bookkeeping processes by using an accounting application. You could also create financial reports instantly. This makes it easier to perform cashflow forecasting and management.
5. Think about having a cash reserve
You know you’re managing your company’s cashflow properly when you’re able to build a cash reserve. It doesn’t have to be a huge amount — just enough to keep your business afloat for a few months and weather the storm.
Cashflow management is the key to your company’s long-term success and survival. It could help you sustain sufficient working capital to get your business through any financial roadblocks or market changes.
Learn more about cashflow management and forecasting with the help of Glance Consultants. Our team works with small to medium businesses and support entrepreneurs in achieving their goals.
For more information on cashflow management, please fill out our contact form or send your questions to enquiries@glanceconsultants.com.au.
