Business Cash Flow – More Important Than Ever
Cash flow is a topic that we discuss at The Accounts Studio on a regular basis. No matter the size of your business, cash flow is always relevant. Lack of cash flow has managed to destroy companies both small and large in Australia, and needs to be a subject which companies are not afraid to confront head on.
For that reason, we have listed some of our most popular blog posts on cash flow so you can find all the handy information in one convenient space.
Your cash flow should not be taken for granted. Often it is when cash flow is scarce that many SMEs understand the importance of having a regular flow of cash in and out of their business. Falling behind in your debt is not fun and neither is having to close your business because you cannot pay your bills.
Unfortunately, many businesses, particularly in Australia, are delaying payment to smaller organisations. Poor cash flow can limit company growth and lead to poor customer service, anxiety, stress and burnout.
There are ways you can improve your cash flow this financial year. These include amending your payment terms to favour your business, setting up a solid plan to collect late payments and having backup cash or credit available.
Positive cash flow does not occur by chance or accident. It requires a solid business plan and a viable cash flow forecast, so you know what is coming in and what is going out. It will help you to make better decisions to assist your business.
If you are looking to ensure positive cash flow in your business, then these five tips will come to your aid. Offering perks, rewards and pre-sales may raise your revenue without the need to resort to discounts. And don’t forget to keep a cushion of cash as a backup.
You have to look at more than just the cash coming in and the cash going out when it comes to budgets and cash flow. Consider improving your systems and making the switch to Xero so you can see at a glance where you stand from a financial perspective.
You can never have too many cash flow tips. Make sure you check and re-check your systems regularly and know exactly what your cash flow situation is on any given day. Insist on a positive cash flow in your business and make sure that it is a simple process to receive your money.
If your customers are consistently failing to pay your invoices, then you need to make some changes. Are they aware of your payment terms? Do you have efficient debt-preventive measures in place? Are you professional with your clients at all times?
Do you have a realistic plan for your cash flow? You need to take into account any shortfalls and consider opening a line of credit to help you when your cash flow is not enough to cover operating costs. Or perhaps you need to think outside of the box to come up with alternatives?