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4 Steps to a Better Cashflow Management


Trying to improve your cashflow but been too busy? Our guide can help you before cashflow becomes a real problem.

You might think that some factors that affect your cashflow are out of your control, however if you manage it well you will be more prepared to handle them. It doesn’t take long for a small downturn in your cashflow to become a serious issue that could threaten your business, so you have to deal with any problem as it arises.

 

Monitor and review

Just like with any other aspect of your business, applying a plan or change is the beginning. You need to monitor your cashflow all the time so if anything does happen you are alerted and can fix the problem as soon as it happens.

 

Forecasting

By having a plan for the future, you will be prepared for any potential issues. It also helps to make a list of all the factors that could affect your business over the next year and how they could affect your business, you should also look at the forecasts and plans of other business that could affect your cash flow.

If you have had your business for a while you can use past data to help you create the forecast. Find out low and high points of your business and find some reasoning for them. If your business is new, then you can try and existing data that is in your industry to do the same thing.

 

Plan for the unexpected

When creating a forecast of things that are likely to happen you also need a plan for things that are unlikely to happen but could affect if your business if they do. Make sure you add this to the forecast.

 

Get paid on time

The faster you invoice your clients the more likely you are to get paid on time. Make sure that all of your clients pay your invoices on time, so it doesn’t affect your cashflow, maybe add in rewards for earlier payments like 10% of their next invoice?

 

 

 

Added: 13 Jun 2019 12:00


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