Cashflow is often a massive headache for entrepreneurs, cashflow issues in the best cases mean that you can’t move your business forward and grow your business, in the worst case scenarios it can mean the collapse of a business. When businesses have cashflow issues it usually means that the money is coming and is due to arrive shortly but as the money is not here and now it’s causing problems for your business. Acceler8me offer consulting services for cashflow planning, that’s why we’ve taken it upon ourselves to give you some quick and simple tips for improving your cashflow.
One of the first things you need to think about is creating a cashflow planner. If you have the budget for it it’s best to utilise cashflow planning software such as Unit 4, however you can also develop a decent cashflow planner yourself through spreadsheets such as excel with a close monitoring system.
Detailed Financial Monitoring
Monitoring your financial statements and invoices as closely as possible, if you notice a single bill that seems questionable, question it. If you were offered a discount for a product or service and the discount wasn’t applied make sure that it is applied. If you stopped paying for a service and are still being charged make sure you get a refund. The sooner you notice any financial discrepancies and the sooner you resolve them the better chance you have of getting your money back.
Getting Paid Faster
Often many businesses will allow their customers to pay a month after their services have been charged, whilst this may be standard practice in your industry if it is always best to get payment in advance. If getting paid retrospectively is normal in your industry then try and see if there’s any way you can get paid in advance by offering incentives such as discounts. This principle can also be applied when your customers pay month-month where you can offer them an incentive for paying annually. Furthermore if your customer is in debt to your company then apply a zero tolerance strategy, as a first point of call stop providing them with your services if it goes further you may need to contact a debt collection company.
Improving Supplier Relationships
Our last two tips for cash flow planning centre around your relationship with suppliers. Firstly if you’re using a lot of suppliers for your business it may be worth seeing if you can develop a relationship where they can offer you interest free credit and if they don’t, try to leverage them against a similar business that will. Finally when you’re buying an overstock of products which end up sitting in a warehouse for months try and rearrange your procurement strategy through your relationship with your suppliers to see if you can purchase smaller orders for similar rates.
Accerler8me offer consultancy for cashflow planning, contact us to find out more.