Top five tips for better cashflow
How healthy is your cashflow? Do you know exactly how much you’ve got coming in – and where it goes? When you run a small business, cashflow is always at the top of your mind, but with a few simple steps, you can gain peace of mind – and even get paid sooner.
- Ensure your accounting data is accurate and up to date, then rely on your internal reporting every day (or every week) to track who owes you money, and who you owe money to.
- Every month, forecast your cashflow. Know in advance if you are going to be short, so that you can explain to your bank in advance and put remedies in place.
- Enforce your agreed payment terms. Don’t rely on emails and reminder stickers: start calling the day the payment is due. You don’t need to be aggressive, but assertiveness definitely helps. You know yourself how you react when someone is chasing a payment. The “squeaky wheel” gets oiled first!
- Be organised and stick to your invoicing schedule. Don’t let invoicing fall behind — if you’re travelling you can use tablets or phone applications to issue invoices.
- Be respectful to businesses that you owe money to, but don’t pay before their terms require unless you are receiving a worthwhile discount.
Would you like more suggestions for maximising cashflow? Contact us for a free consultation.