Nov '23 in Resources
How to Manage Cashflow - new article in the business school
New article in the business school under "Classroom", you can download the document
How to Manage Cashflow
•Top tips for managing cash flow
•We all realize that times are tough, and in many cases, the Top tips for managing cash flow Cash is king. In many cases, the key to running a robust business is the management of cash flow. Below are a series of tips that could help you improve your current cash flow situation. You may find it helpful to have a meeting with your finance manager and go through the tips below. After the discussion you may find out that cash flow is well managed in your company. But if you identify any gaps, you may find these tips useful in taking some practical steps to improve your cash management. You may also want to share these tips with your customers and in particular with those businesses that you know could benefit from advice.
• Project your cash flow
•Projecting your cash flow in advance will enable you to identify periods when cash flow might be tight, allowing you to look at potential credit facilities to help the business through this period. You’ll also be in a stronger position to negotiate a credit line when you don’t actually need it.
• Call in the cash promptly
·Ask your customers to send their orders to you by fax or e-mail
·Send your invoice at the earliest opportunity. The earlier you send it the greater the chances of you being paid on time
·Encourage electronic forms of payment (such as BACS) to speed up the process of money being received
·Cash cheques immediately
·Adopt a ‘carrot and stick’ approach to customers based on how good they are at paying their bills on time. Look at offering discounts to customers that pay before the due date, or cash on delivery. Apply ‘late payment fees’ to customers that are late with payments.
• Do your homework before offering credit
•Credit check new and existing customers before providing credit. It is also a good idea to ask new customers for business references and check them.
•Check daily – Chase Regularly
·Check daily on money owing and chase it up on a regular basis.
·Send an immediate note if payment is not received on time, and follow up with regular phone calls requesting a payment schedule.
·Suggest alternative ways for customers to pay invoices if they themselves are struggling for cash flow. One alternative may be payment via credit card, in which case additional fees are to be considered.
·Do not be tempted to send further products until outstanding flow problems.
• Keep a close eye on inventory
·If cash is tight, make sure you invest the available cash flow into those products that generate the largest percentage of sales (fast movers).
·Determine your obsolete stock on a regular basis.
·If a product is not selling, you may consider a discounted price. After all, you will be getting cash instead of having the product gathering dust.
• Use of credit card
•Use credit cards instead of cash when paying for business travel, accommodation, food etc. That way you can keep your cash for longer before paying off the credit card. However, when using credit card make sure you control your repayments in order not to fall into high interest payments.
•Do not fall into the habit of issuing advances to employees. Have them use their personal credit cards or business cards, if you provide them.
•Disclaimer: The information in this document is provided for general information purposes only by Steps to Growth Ltd. No representations or warranties, express or implied, are made by Steps to Growth Ltd. or any of its representatives or affiliated companies concerning the applicability, suitability, accuracy or completeness of the information contained herein and Steps to Growth Ltd. accepts no responsibility whatsoever for the use of this information. Neither Steps to Growth Ltd., nor any of its representatives or affiliates shall be liable in any way for any liability, loss, cost or damage incurred as a result of the receipt or use of the information contained herein.
0
0 comments
How to Manage Cashflow - new article in the business school
Public group
The place for entrepreneurs and business owners to grow their business through effective marketing plans and tools.
powered by