Cash flow is essentially the lifeblood of your business, and it is about much more than being successful. In addition to raising revenue, a healthy cash flow is determined by organisation and planning. Here are some tips for managing your cashflow:
Set yourself realistic targets that will meet your business’s needs for the next six to twelve months. You should always factor in having enough surplus cash to make business improvements.
You should monitor your cashflow closely, checking to make sure you’re on track to meet your targets. This way you will be sure to pick up on a downturn before it’s too late.
You need to invoice your clients quickly, as there will already be a delay between them receiving the invoice and making the payment. Many businesses inadvertently shoot themselves in the foot by failing to invoice in a timely manner.
Use the right software
Cloud accounting software can be a lifesaver when it comes to managing cashflow. You should talk to your accountant about packages that may be suited to your needs.
Do not be blinded by profit margins
Many small businesses fail because they focus on profit at the expense of cash flow. Profit is important but does not mean anything if you do not have the cash flow to keep your business afloat.