Managing your cash flow is an essential part of running a small business. It will help protect your business’ profitability and minimise the effects of economic changes. Here are our top tips for managing your cash flow.
Choose high-quality accounting software to help you manage your cash flow and keep your finances up to date. Good software can automate and streamline administrative processes such as creating invoices, tracking payments and running reports. Many software options are available on mobile, so you can access information wherever you are.
Look for ways to reduce your expenses. These include:
- Cutting down on staff overtime
- Making your business more environmentally friendly, such as going paperless, recycling materials, and turning off appliances, computers and lights when not in use
- Improving the efficiency of processes and systems.
A key step in managing your cash flow is ensuring you have money for an emergency. Your cash reserve should ideally be a separate account. Aim to set aside a small amount regularly and have this automatically paid. It will put your business in a strong position in the long term.
Create a system for keeping track of customers who owe you money. It may be helpful to send invoices when jobs are completed, or products are delivered. Make your invoices easy to read by having clear due dates, amount due and payment methods. Email invoices rather than mailing them.
Running a business has many expenses, so you may consider finance options such as small business loans and equipment finance. These solutions allow you to buy equipment or access funds for growing your business without impacting your cash flow. We can provide advice on the right solutions for you and your business.
We’ve helped many business owners manage their cash flow and understand their finance options. If you require strategic, ethical guidance, contact us today for an appointment.