TOP 10 Tips For Managing Your Cash Flow

Managing cash flow is critical to ensuring your business can meet all its obligations, takadvantage of opportunities and grow. Here are 10 tips to improve your cash flow and ensure your business has the necessary funds available to achieve its goals.



  1. Use a Cash Flow Budget

Plan your cash flow using a Cash Flow Budget {CFB). A CFB is an estimate of all cash receipts and payments that are expected to occur during a future time period and the resulting bank balances. Estimates can be made weekly, monthly, bimonthly or quarterly. A CFB is a vital business management tool enabling you to understand your business cash flow and foresee cash flow issues giving you enough time to deal with them.

  1. Maintain Some Cash Reserves

Always have sufficient surplus cash available to cover unexpected or unplanned payments – either funds in your business bank account, an overdraft facility or personal funds.


  1. Collect Receivables ASAP

Monitor aged accounts receivable reports and follow up late paying customers. Set up payment plan arrangements with non-·paying customers. Send letters of demand for long-outstanding debts. Review your customer payment terms, particularly with slow paying customers, and ensure these are agreed clearly with all customers. Consider offering early payment discounts or asking for a deposit.

  1. Invoice Accuretley and Quickly and Make Payments Easy for Customers

Ensure your invoices are accurate and email them to customers as soon as the work is completed. Make it as easy as possible for customers to pay you always quote your bank account details on your invoices and ask for direct credits or automatic payments. Accept Eftpos and credit cards and set up a PayPal account on your website.


  1. Improve Stock Control

If you carry stock, cash can be unnecessarily invested in excess or aged stock. Keep accurate stock records and regularly (at least once a year) match the records to a physical count. For aged or excess stock, either sell at whatever price it takes to move it or donate it to a charity or community group. Understanding your stock e.g. which items move quickly, will help you determine how much of each item to keep on hand.


  1. Extend Payables as long as Possible

Negotiate and take advantage of the longest possible payment terms with your suppliers. Be sure to maintain good relations and communications with your suppliers so they’ll be more willing to help you out.

  1. Review your Numbers Regularly

Ideally, you should monitor your sales and expenses daily. At a minimum, reconcile and monitor your bank account, accounts receivable and accounts payable each week. Constantly review your results against budget and look for ways to cut costs or improve revenue.


  1. Use Technology to your Advantage

There are a rapidly growing number of cloud-based accounting and business management systems that can simplify cash flow management by enabling you to monitor your receipts and payments at a glance, view dashboards and reports, tracking when receivables and payables are due, monitoring stock and more.


  1. Designate a Team Member to Monitor Cash Flow

Assign the task of monitoring cash flow to a trustworthy employee.

  1. Keep your Bank Informed

Regularly updating your bank in relation to your cash flow should increase the bank’s confidence in your business and in your management of it, and may assist if you require an additional facility to fund unexpected payments or to grow your business



Applying these tips should improve your business cash flow meaning that it has sufficient cash to fund its operations and growth.





Achieve Business Dynamics
Achieve Business Dynamics
Achieve Business Dynamics
Achieve Business Dynamics


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