One of the principal struggles for many small businesses is achieving efficient management of cash flow. While the fundamental process of cash flow management may seem simple in theory, it can be anything but in practice. Here are a few easy-to-follow tips on better managing your cash flow:
Prepare cash flow projections: Preparation of regular cash flow projections is essential for cash flow management. Business owners should remember that projections are not fixed agendas of how the future will pan out, rather they are educated guesses which should incorporate all available details including dates and amounts for both receivables and payables in order to maximize accuracy.
Improve your receivables: Ensuring customers pay on time is more a fine art than an exact science. Try offering discounts to customers who pay their bills promptly, and/or have customers pay deposit payments at the time of order submission. As always, prompt issuing of invoices and regular follow-ups are essential to improving your receivables situation.
Defense against shortfalls: If you foresee a shortfall in cash some time in the future, it is vital you start planning a means of combatting that shortfall immediately. Many businesses find a business cash advance or a short term loan are convenient methods of easily securing the cash required to bolster a business’ defenses against late payments and cash shortages.