In business, turnover can be defined as vanity, while cash flow is reality. Whether you are manufacturing, distributing, or importing goods, cash flow is the lifeline of your business. However, keeping your money moving in order to align your income and outgoings can be incredibly difficult to do. If you are having trouble aligning your cash flow, then you should contact Clarke Bell today.
If you are thinking of starting or have just started a small business, you may wonder what business cash flow is definable as. You may also want to know how to keep it flowing. Here are five key tips that will help you to manage your overall cash flow:
Send Your Invoices Quickly
An effective means of avoiding any issues from arising with your cash flow is to speed up the amount of time that it takes you to send out invoices. Instead of waiting until the end of the month to send them, you should send these straight away along with the delivered goods or whenever the work has been completed. Your customers will still be provided with the relevant amount of time to make payments according to your trading terms. However, you will save yourself time from the start.
Make It Easier For Customers To Make Payment
You should try to make use of mobile payments as this way, you will be able to be paid as soon as the job is completed. There are numerous means of doing this, you just need to consult with your bank. This means that you do not need to chase invoices as the customer is able to make payment straight away which usually makes things more straight forward for them inherently.
If mobile payment is not a requirement for your specific business, then you should try to simplify payments made by customers, ensuring that they remain a priority. Thus, considering making online payments is a good idea, even if this is just ensuring that you have a modern system for payment.
Use Technology In Order To Manage Your Cash Flow
Managing cash flow via your business is a hard enough task as it is, and this is without taking into consideration the tax workload and accounting costs that come alongside. Thus, you should consider using a cloud-based system for your accounting, ensuring that managing your GST becomes far easier.
The best accounting systems come along with plug-ins like quoting, job costs, inventory management, and payroll. These remove the burdens of system administration while automating numerous processes on your behalf. You will find that you are able to eliminate any costs that would otherwise be associated with printing, postage and paper consumption. The IRD now accepts submissions electronically in most instances also.
Liaise With Your Bank On A Regular Basis
You should stay in touch with your bank as building a good relationship with them means that they will be far more insightful and informed whenever you are managing pressures within the business. Growth can place pressure on cash flow and your bank will be able to help you with this. The more that your bank knows concerning your business, the more that it will be able to help you out.
Make Predictions For The Future
Cash flow forecasting is definitely recommended in regard to your business. This can be summarized as a forward-looking cash book that analyzes your expected costs and income. Doing this will enable you to sort out a plan for the following months and weeks. This inherently allows you to meet any relevant tax obligations and payments while also estimating any working capital needs.
Conclusion
To conclude, this article has outlined five ways to enhance the overall cash flow of your business. Cash flow is key to the success of a business, thus, you should ensure that you implement the tips that I have outlined in this article in order to make sure that your business has longevity.
Making a cash flow forecast is also highly recommended as this will ensure that you can appropriately analyze any expected costs and income, and make arrangements for payments accordingly. Planning months ahead is always recommended, as you will have more control over your cash flow, and will be able to make the best decisions for your business.
You should ensure that you have built a good relationship with your bank, as they will be better informed about your cash flow, and will be able to advise you accordingly. I hope that you have found this article to be insightful and informative. Thank you for reading.
