Tips to manage your cash flow

Business - 07/06/2021

You need to stay on top of your cash flow when you’re running a business. If you don’t, you could face serious financial problems further down the line. It could lose you clients, and even cost you your business.

Manage your cash flow so that your business can grow and thrive.

Be on the ball with your books

Your books need to be kept as accurate and up to date as regularly as possible. Staying on top of this means you’ll always have a clear financial picture for your business. You’ll be able to spot potential problems with cash flow and nip them in the bud early on.

Don’t be afraid to chase up payments if necessary

It can feel awkward chasing up clients for payments, but sometimes it needs to be done. It’s about finding the right balance. Be direct and fair without being a pushover. A clever but polite invoicing strategy will usually get you a long way. Don’t be afraid to take more formal action if you need to.

If you see a pattern developing with overdue payments, address it as early as you can. 

Forecast cash flow

Predicting a few likely scenarios of where your cash flow might be in the short-term and long-term is really useful. Be prepared for potential hiccups in future. 

You could invest in software that specialises in cash flow forecasting, or you could use a simple spreadsheet to do it yourself.

Set aside a safety net

Building a cash reserve in case of emergencies is a sensible way to manage cash flow. It could even save your business. It might not be possible to set much aside, but even if you can invest a small amount into your safety net, it will give you some reassurance and confidence if any unexpected problems crop up later on.

You’ll also be able to take advantage of opportunities when they present themselves. For example, you may have the opportunity to pick up inventory at a deep discount, or take on a large order or new client. With a cash reserve, you’d be able to grab those opportunities when they come up.

It might feel like you’re making less money in the short-term, but you’ll reap the long-term benefits.

Outsource with an expert

If you’re unsure about your business’s cash flow, it’s always worth consulting with an expert. If you have concerns about putting your accounts in someone else’s hands, we talk a lot about why it would actually be the best decision for your business in one of our previous blogs.

Not only does it give you more time to focus on other aspects of your business, you’ll also have an expert who knows the ins and outs of accounts in your corner. 

Here at Numero, that’s what we do. Let us take care of all your bookkeeping needs, so that you can take care of what matters most to you: making your business thrive. 

Get in touch with us today to find out more about how we can work together.