Sailing through turbulent waters, when it comes to cash flow? Read this blog post to find out 9 interesting tips on cash flow management.
Trying to successfully run your business without managing your cash flow is like trying to row your boat without an oar. Effective cash flow management is a must for all businesses, especially start-ups. Cash flow management can assist you with managing your accounts receivables, payables and shortfalls. An effective management of all three can put your enterprise on the road to success.
Here are some tips on how to successfully row your cash flow boat with the aid of cash flow management services:
1.Evaluate your breakeven point
Determine when your business will become profitable. This will give you a goal to strive for and a target to project your cash flow in the future. Understanding your breakeven point can help you focus towards achieving a profit, while managing your cash flow.
2.Cash flow management should be your focus
Utilize your breakeven point as a benchmark and when you reach it, be sure to manage your cash flow. Effective management of your cash flow, becomes all the more important when your business is profitable.
3.Conserve some cash reserves
You will encounter cash shortfalls. To get ahead of such shortfalls, it is always wise to start with some cash in your bank account. You will find it a lot easier to focus on your cash flow, without having to stress about the shortfalls.
4.Use cash flow worksheets
Be sure to use specific cash flow templates, while charting out your cash flow management details.
5.Collect receivables on time
Ensure that your contract keeps net-30 and net-60 terms to a minimum. Keep an eye on your receivables and contact your customers periodically, so that you always receive your payments on time. By offering your customers with early payment discounts and by keeping your credit requirement strict, you can encourage your customers to pay you on time.
When it comes to payables, make sure that you get a best deal, though you would not want to pay a late fee. Try extending your payables to net-60 or net-90.
7.Use creative incentives to boost sales
Hosting a customer event, sponsoring a program, taking a few employees on a publicity tour or offering referral incentives are some creative ways to boost your sales.
8.Recruit a cash flow monitor
Hire an employee to monitor your cash flow. Ask the person to inform you about each and every development in your cash flow.
9.Make use of technology
Store your cash flow spreadsheets in the cloud on sites like OneDrive or Dropbox. This way, you can have access to them on an anywhere, anytime basis. Technology can also ensure that your files always remain secure.
Keep in mind, that your enterprise can survive any amount of turbulence, if your cash flow is positive. Why not give your business an advantage by outsourcing cash flow management?
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