Top Tips: Business Cashflow for Small Business
Those who have been reading the previous blogs will have become familiar with the advantages of controlling your business cashflow, resulting in some “less worry” about whether the cash in your business will cover your expenses or wages, at the least. Just to get some perspective on the essence of cashflow management for small business, I have put down some tips to aid in achieving the “less worry” mindset.
- As a small business, it’s imperative that you keep the cashbook and cashflow forecast in front of you as often as possible, daily would be my recommendation. If, as the business owner, this is not possible, get someone to keep tabs for you as often as possible. This is more so, important, for start-ups or young business, as growth is more-than-not, the number one priority and growing a business requires money and any mismanagement of these funds will lead to finding yourself sinking in a quicksand of expenses and unpaid bills
Top Tips: Preparing a cashflow forecast is essential to having the information at hand about your businesses cashflow and where it’s heading. Download a templete from the following link which you can incorparate into your business: http://office.microsoft.com/en-us/templates/small-business-cash-flow-projection-TC001113236.aspx
- Invoicing is an integral part of ensuring cash continually flows into your business. You would be surprised as to how many small business do not make this a priority in their business and only react and inspect this process when cash becomes a problem .Invoicing activity, if adhered to, has a significant impact towards your cashflow in that, 1)presents to your customers a formal request for payment 2)is a formal agreement of goods/services rendered., ensuring all parties are on the same page.
Top Tips: Invoice promptly and accurately. This will ensure you received you cash in the shortest possible time. Add stringent follow up on the invoices dispatched
- Collection of due payments needs to be part and parcel of your business activity. If your business is composed primarly yourself, it is imperative you set aside time during the course of your trading, say once, twice a week, to make collection calls, even if it is just a quick reminder your customers. One aspect to collections to remember, collections start from the point a customer puts through an order, not when the money is due. Use all communication medium available, including social media to ensure you get the message to your customers.
Top Tips: Ensure you establish a collections plan from the onset with your customers i.e. COD or 30 days. This effectively will be your fall back plan when doing your collections and when experiencing problematic customers.
- Easy of payment. Make payment by your customer as easy and flexible for them as it allows. You will find as a small business, particularly with a few big customer, if payments to you are “painless”, in terms of administration, these customer will make due payments to your business in preference, due to less admin. This in itself has competitive advantage to be utilised As the business owner, consider payment structures such as online payments, EFT, payments through mobile phones, over cash payments or cheques.
Top Tips: Easing payment process will ensure your customers will be open to making payments to you, which do not involve extensive admin., ensuring you receive your cash quicker.
If you need further informations, please drop me an e-mail - Dumikm@Optikollect.com
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