Cash is king and is definitely something any business needs to keep afloat. However, cash flow is a problem when you don’t manage it successfully. With invoicing that needs to be paid, orders and money that needs to be divided between expenses, overheads and profit it can be daunting to ensure that you keep everything above board. Which is why I thought I would share with you some of the steps you can take to ensure that you manage cash flow effectively.

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Have a decent cash flow projections

It is so important to ensure that you make cash flow projections for the next year, the next six months, month or even within the next week to ensure that you are fully aware of what your current financial situation is when it comes to your business. It is important to understand the projection isn’t set in stone, but it enables you to make changes or save when possible if you project that certain times of the year may mean you are shorter on funds than at other times. It is important to project on what cash you will have, and not a projection on what you may have in regards to hitting sales targets. It’s more about ensuring that you know where you stand, rather than predicting where you could be.

Improve receivables

Sometimes you don’t get paid for sales instantly. This isn’t about the general public purchasing on your website and making a payment straight away, this is normally between trades where you need to offer a thirty-day payment window for invoices to be completed. Many businesses will wait until the opportune time for them to pay the invoice, and that is something we discuss later. But, don’t get yourself into a mess when it comes to waiting on payments. Websites like merchantcashadvances.co can help to improve your financial situation by lending funds to tide you over, based on the amount you take via debts into your business.  

Be careful with your outgoings and payables

It is just as important to ensure that you are also careful with your outgoings and your payables. This means that when you have your outgoings to consider, such as invoices yourself, then you make the most of the payment obligations you have to your advantage. It might also be a good idea to discuss your business financial situation with creditors so that they are fully aware of when they are likely to receive funds. This extends respect and also helps them to manage the cash flow projections within their business.

Making sure you survive the shortfall

Finally, you need to ensure that you manage any shortfall you have. A quick way to do this is to go back to the first step and be aware of your cash flow projections. Being aware of the shortfall ahead of time enables you to make sure that you cover expenses due and that you have the time to rectify the shortfall as quickly as possible. Thankfully websites like entrepreneur.com are full of tips and advice.

I hope these four steps help you to manage cash flow within your small business.