Managing small business cashflow
With a small business managing cash flow should be top of the list.
In property the adage is ‘location, location, location!’ whereas for a small business this should be…’cash flow, cash flow, cash flow!’
Being prepared is your first priority and having cash flow and profit forecasts in advance is key. However, the cash flow forecasts will only help you plan forward, but they will not change the way you run your business.
It is vital that you make sure you invoice on time and collect all monies due. Don’t delay in any of these processes, plus make sure you invoice all your services or products supplied.
You may think this is obvious advice, but I’ve come across many businesses which either forget to invoice for services rendered, invoice very late or don’t bother to chase their customers for payment.
Each of these elements have an impact on the business’s cash flow.
Consider taking payment up front or taking credit card payments also. You may suffer a small credit card fee, but this will be more than compensated by the advanced cash flow into your bank account.
Set up key KPI’s for each of these areas, and if you’ve not already done so, make sure you install a good CRM and sales management system which is linked to your accounts program.