After the stress of the holiday period, there are plenty more times throughout the year that cashflow issues can become a recurring problem that you need to get on top of.
Small businesses with cash flow problems may put themselves at risk of failing or suffering significant financial hardship.
Cash flow provides a business with stability so they are able to pay employees, avoid loan defaults and pay the overheads necessary to keep their business up and running. Follow these tips to boost your cash flow so you can secure your business’ future.
Preparing financial statements will give you an objective insight into the health of your business. Identifying if you have a cash flow problem is the first step to coming up with solutions. Looking into the following reports will allow you to see if your cash flow is up to scratch.
After analysing your cash flow situation, is your cash flow cyclical?
Creating a yearly budget is not only imperative to receive financing in future, but will also help you identify the best months to save to cover the quieter months. Where applicable, business owners can consider flexible rostering, whereby employing casuals and using a flexible roster can help you cut back on hours when you need to improve your cash flow in quiet periods.
When you have identified your quieter periods of the year, try to find additional revenue streams for when cash is low. Is there a product or service that could be introduced? Work with your team for new ideas to cover low cash months.
Allowing late repayments jeopardises your cash flow and can put you in a tight financial spot. Avoid being out of pocket by implementing some of these credit policies:
If you’re looking for assistance with invoicing, chasing payments or a general checkup of your business’s cash flow situation, accountants like us are equipped to help. Speak with us to find out what we can do for you.