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Cashflow tip – Top ways to have better cashflow – 5 top tips
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Published on Thursday, 21 March 2019 16:50
One of the top problems many businesses find a burden, is that cashflow can easily get out of hand , so what are some top ways to have better cashflow?
Several studies suggest that financial miss-management is one major contributor to business failure. Here are 5 tips to help get cashflow under control – remember it is an on-going monitoring that keeps you on top – measure and tweak, measure and tweak…!
- Look at who owes you – WEEKLY – check your debtors/accounts receivable report every week – get onto those tardy payers – send Statements every Fortnight! A month is too big a gap and easy to slip the mind.
- Plan for highs and lows - Be aware of possible lean cashflow patches coming up and plan for them!. Avoid major purchases from your business’ working capital unless you are sure you have cash to cover it. A cashflow budget will help you see this – eg when revenue is down on forecast you expected (eg the average monthly required, or based on same time last year, or certain % growth if that is the current trend).
- Have finance products working to your benefit - Overdrafts, premium funding, lease facilities and cashflow funding products can all be excellent tools to help boost a business’ cash. Even the business credit card can be a good way to ease the squeeze as long as you are sure the debt can be paid before interest kicks in, which is the best way to handle credit cards!
- Avoid penalties -Keep on top of taxes and compliance to save the cost of fines… and the stress!
- Keep your hands out of the till - Make cash drawings for personal purposes as minimal and follow conservative cashflow forecasts. Take a weekly set wage for yourself so it’s easier for the bookkeeper/accountant, and gives stability to regular expenses and drawings so you can PLAN better!
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