How to get your cash-flow back on track
I know that everyone general knows about cash-flow but sometimes it is necessary to go back to basics to get our head back in the game again.
When I look at my own company Money in Motion I am always astounded at how making the right spending decision at the right time makes all the difference in succeeding or failing. This brings me to cash-flow and how important it is. Here are a few tips that can make life a lot easier for you and your business.
Break Even Point
Before you start thinking about cash-flow it is vital to understand what your break even point is. Put realistic goals in place in order to know what your limits are and from there you can work toward building up a relevant cash-flow
Focus on the milestones and be strict not to veer to far off from the guideline you have put in place.
Manage the Cash-flow
On a daily basis take a look at your cash-flow. The more you keep your hand on it the less chance there is of something going wrong.
Manage your funds optimally
Don’t be spending hours and hours trying to run the accounting side of your business. Hire a reputable accountant that you can have an open ended channel of communication with.
Get the software that your accountant recommends onto your systems to make your workflow precise. This keeps your books in order and by having an accountant you minimize the chances of inflated tax payments and penalties. This will go along way to keeping your cash-flow above the water and keep your business going for many years to come.
Try and get your client to pay as soon as possible. Having fictitious income is not cash-flow and can cause you to go through a very difficult time when you need that cash. Minimize risk and get paid sooner than later.
Paying your suppliers
Try and extend payment dates with your suppliers wherever you can. You can always pay them immediately once you receive an invoice if you have more cash-flow than needed. But having said that you should always try and pay as late as possible depending on your suppliers terms. Avoid deals with interest clauses. This can be of huge determent to your cash-flow.
Spend money on essential only. Don’t splash out when you get paid a huge amount of money by a client. Keep things simple and only purchase what you truly need.
Be sure to hire competent skilled workers. You might have to pay a bit more for them but the amount of work and excellence will cost you a lot less than hiring 2 people to do one experienced persons job. This is a great way to save on cash and will also be good for the professionalism of your company.
Use good Tech
Using the latest computer isn’t what I am referring to but rather be up to date with easier and faster ways to do things. Get a good cloud based backup system in place, use current software that is updated regularly and be on the look out for new systems to streamline your workflow. By doing this you can have more time to manage the business on other levels and you will have more control over your cash-flow. An added bonus is that if something goes wrong you can easily access your cloud backup and get things running in a very short time. This will save you many hours of trouble and in turn cash-flow.
We would gladly assist you in getting your software in order by pointing you in the right direction as to which Pastel Accounting Software you should use.
Contact us so that we can help you.