6 Great Tips For Managing Cashlow

1. Keep a cash flow forecast
   Set targets for the next six to 12 months to keep track of finances and to avoid any shortfalls. The most basic way to set up a cash flow forecast is to keep a simple spreadsheet listing income and costs on a monthly basis.Take note of any seasonal variations – for example, heating bills will probably go up during winter. Factor in fixed and variable costs to your cash flow forecast and be realistic – include every item.
2. Keep on top of payments
   Send out invoices promptly and be quick to chase overdue bills. It’s also worth setting out clear payment terms with suppliers from the start of doing business with them – 30 days is standard.Get to know your customer payment dates and don’t ignore irregularities or delays – a poor paying customer might be about to go bust. Knowing when you’re due to be paid for a product or service will help you keep on top of your cash flow.
3. Stay friendly with lenders
   Many businesses need a cash boost from a bank or lender every now and again, particularly when they’re starting out, and might need credit or an overdraft to get up and running.

    

   Stay on good terms with them and keep them informed of any unforeseen outgoings or changes in forecasts.

   By developing a good relationship, based on trust, with banks and lenders, they’ll be more likely to treat you favourably should your business need future financial assistance.

4. Access credit
   If your business is still performing during the Covid-19 period, or in any period for that matter you should seek access to credit options like CommCollect.

    

   Once a property settles, you can pay your debt easily and use the cash to continue your businesses growth.

   You will only have to pay interest for the amount of time you actually need the cash.

5. Tighten up on your outgoings
   Assess the frequency with which you pay suppliers, tax bills, utilities and so on – is it possible to pay in instalments or make terms more flexible?

    

   Use your powers of negotiation to strike deals that are favourable to you and your business.

   Also, check on all those little things you spend money on that can add up – as the old saying goes, watch the pennies and the pounds will take care of themselves.

6. Anticipate problems before they happen
   Identify potential cash flow problems in advance by regularly updating your cash flow forecast, monitoring market conditions, keeping an eye on customers and suppliers who may be in trouble, and taking action as soon as you see a problem.

    

   Don’t bury your head in the sand and hope an issue will go away. By keeping on top of your cash flow you’ll be able to deal with problems quickly and efficiently. Also, if worried, talk to an accountant, investor or business mentor.

This article is adapted from another article that first appeared at https://www.sage.com/en-gb/blog/7-tips-to-avoid-a-cash-flow-crisis/#gate-b1a63862-3fa0-4a5e-bb67-c76b88bbc6b8 on 17 Jul 2017