A healthy cash flow is critical to all businesses and whilst most businesses have basic systems and processes in place, it is very easy to lose track and lose efficiency, especially in the run-up to Christmas. In limited words, good cash flow can make a business and poor cash flow can sink it. Therefore, here are my top tips to ensure you conquer your cash
Keeping on top of your payments is essential when trying to manage your cash flow, and though this may sound like the most obvious of tips, it is certainly one to maintain throughout the whole year. The key is to not only send invoices promptly but to be quick when chasing any overdue bills. When finalising any deals or contracts, be sure to set out clear payment terms and deadlines from the start and get to know your client payment dates. Always learn the name of the individual who will be dealing with your invoice as this is not always necessarily the contact you are dealing with within the businesses and use them as your point of contact with regards to anything monetary.
No one likes a scrooge, though an important aspect of my role is to ensure people within the business don’t become too extravagant with our outgoings. Those little things that cost a few pound here and there soon add up so be wary of ordering surplus stock, reign in the office orders and question those asking for questionable petty cash purchases. Check with your providers, as to whether you're entitled to a discount or if there’s a cheaper tariff available based on how long you’ve been a loyal customer for and haggle. Quite often those businesses have room to negotiate, though they're never going to give you their cheapest rate off the bat. Ask the question and see where you end up.
A sure way to avoid problems after a sale is to ensure they possess a strong credit rating, to begin with. Do the necessary research, educate your team, and take the time to assess situations. Listen to your network, if a business has a bad reputation for not paying their invoices, chances are its there for a reason. Utilise your connections and go by word of mouth when it comes to taking on new ventures.
Technology can be an accountant’s best friend and can make the process of managing cash flow a lot easier. Having a thorough system with software in place to manage your finances can not only save time but allows you to work more effectively and keep better track of what’s going on. Embrace modern times, and explore the wide range of solutions available that will free up your time and allow you to focus on other tasks.
My tips are all relatively simple to implement, yet are effective enough to strengthen your cash flow and free your time to ensure it is spent more strategically within the business. It’s crucial to remember, however, that cash is king throughout the whole year, not just at Christmas, though anyway in which you can ease the pressure at the busiest time of year will benefit everyone. Now, enjoy your well-earned Christmas break in the knowledge that your finances will be in a strong position waiting for you when you return.
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