Generating Cash Flow Made Easy
In my Cash Flow article
I mentioned some tips on cash management. But how do you get enough cash to manage? Top tips:
Shoeboxes are not for business records. If you don't keep good records you'll never know who owes you money, who you owe money to and cannot track your income and expenses.
Speed up the receipt of cash. E-invoice immediately, don't let customers take liberties, make friends with whoever pays your bills, don't give them any excuses not to pay by pre-empting or dealing with any queries early and offer early settlement discounts if you need to.
Make it as easy to pay you as possible by asking for direct credits, automated payments and accepting eftpos and credit cards. Why wait for a cheque to be posted?
Put customers on retainers. You may have to offer a slightly better deal but you get security and can forecast your income.
Always be on the lookout for ways to cut costs or improve revenue. If something or someone doesn't save money or boost income, do something about it or them.
Monitor your inventory closely as overstocking can tie up huge amounts of cash.
Know what your break-even point is. If you're not achieving this and you can't currently increase your cash inflows cut your drawings or costs until you do.
There are many other ways to improve your cash flow. If you need help to boost yours I have developed a useful 60 point Cash-Flow Generation Checklist, just let me know.
If you have any tax or business queries of any kind telephone 0800 ASK NICK, e-mail firstname.lastname@example.org or use "Contact Us" on www.abac.co.nz. The information in this article is of a general nature and should not be relied upon as a substitute for specific advice.