Managing cash flow can be tricky for all businesses. It’s easy for your projected sales to be less than you expected or for you to forget about a payment, which can be a massive problem if it means that your outgoings are more than your incomings. Few businesses can survive for very long on little to no money, but lucky for you, here are some simple tips to help you avoid cash flow problems.
Keep On Top Of Payments
It can be easy to forget about a payment or two if you’re not properly on top of them. To avoid this happening, ensure you have a list of all bills that are due, ensure you send out invoices quickly and don’t ignore any late payments, or customers that pay irregularly.
Forecast Your Cash Flow
Set up a spreadsheet of all of your income and expenses that occur every month. This will help you to make targets for anywhere up to the next twelve months, and will also help you to keep on top of your finances. When you do this, you will be able to identify any times during which you regularly have cash flow issues, which will help you to plan for them.
Be Friendly With Suppliers
It’s always good to maintain a friendly business relationship with your suppliers. It’s unlikely that you will be able to delay paying your rent or mortgage when you are going through cash flow problems, but your suppliers are different. You may be able to negotiate delaying your payment with suppliers, especially if you have a good relationship with them.
Have Access To Credit
It’s always good to have access to a line of credit, just in case your cash flow problems are making it hard for you to cope with the day to day expenses of running your business. Companies like Working Capital compares different working capital loans and credit cards to help you find the best one for your business and circumstances.
Be Friendly With Lenders
Much like with your suppliers, it is incredibly beneficial for you to have a good business relationship with your credit lenders. If you keep on a friendly basis with banks and lenders and show them that you are a trustworthy person to lend to, then they will be more willing to help you out when you’re having financial difficulties.
Tighten Your Belt
If you make any regular payments that aren’t benefiting your business, such as subscriptions that you don’t really use, then you should consider getting rid of them. There is no point in continuing to pay out for things that aren’t helping you to bring in profit. If you cancel these now, you will avoid having them cause any issues in the future.
All businesses experience cash flow problems at some point, but as long as you keep on top of your finances and cut out any non-essential payments, you should avoid any major catastrophes.