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Business Cash Flow Disasters You May Want To Avoid

– Contributed post –

4 March 2018. Any business owner will agree that cash flow in your business and on the accounting side of things is important. However, it can be overlooked at times as you start to focus on other aspects of your business such as getting the sales in and the marketing campaigns. But, not keeping an eye on this element of your business could be a disaster. I want to share with you some of the things you would do well to avoid and how you can solve some of the common cash flow dilemmas.

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Getting paid when you invoice

When it comes to your invoicing, you often will give a thrifty day payment window, especially within the trade. After all, you could be given the same level of care when people and businesses invoice you. However, because of that payment window, you may be left without the funds for that period of time, as a business will be attempting to manage their cash flow more efficiently. This is when invoice financing could be the way forward. Allowing another company to pay the invoice for you and let them receive the paid invoice in full when the time is right. This gives you the chance to have money in the bank at the earliest opportunity.

Paying out invoices

While you may want to be clever with money coming in, you can also take advantage of payment windows yourself when it comes to what you owe out. You may want to work out what you need or pay out versus what you have due to come in, so that you can effectively stay one step ahead when it comes to the cash flow of your business.

Having decent cash flow reports and money projections

It is vital to ensure that you make cash flow projections for the few weeks ahead, as well as having the right level of reposts for the next month, six months and even year ahead. The more prepared you are with predicting where your business will be from one day to the next when it comes to money in and money out, the better prepared you can be for the future. What it also does is give you the benefit of time, a chance to change the course your business could be taking. Maybe saving on expenses and overheads or even just being more savvy with the way you do business.

Managing and surviving the shortfall

Finally, you need to ensure that you manage the shortfall that you may have when it comes to money in and money out. The best advice for this is to go back to my earlier step and be aware of your cash flow reports and the money projections for your business. Being aware of potential shortfall ahead of time enables you to make sure you can cover the expenses of your business, and that you rectify the shortfall as quick as possible.

I hope that some of these options help you avoid cash flow disasters in your business.

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