DO YOU KNOW YOUR BUSINESS CASH FLOW ABCs (May 16, 2017)
Cash flow isn’t rocket science, and some basics applied well goes a long way. You don’t have to be an expert to navigate your business’ cash flow needs, but you do need to know the basics the ABC’s, and do them well.
So here are a few of the basic ABC’s:
1 Make debt chasing a regular part of your monthly routine, whether you like doing it or not. Alongside this, make sure you invoice correctly and quote purchase order numbers so nothing holds up the payment cycle.
2 Create a cash flow forecast so you know what is coming up and when. That way there are no surprises and you can anticipate the tight spots ahead of time – especially important if you have a seasonal business, or in growth mode.
3 Know your financials that way you know how much profit you are making, and won’t be tempted to draw out more.
4 Set aside what doesn’t belong to you GST, PAYE & other tax obligations.
5 Know your back up options will your bank offer temporary overdrafts? If not, you could fill gaps with other short-term options like Invoice Discounting services.
Business cash flow can be challenging at times, especially when you are growing or faced with the unexpected. Knowing your options is important and can make business life considerably less stressful, as well as giving you options to grow.
If you would like to know more about Invoice Discounting a short term cash flow option designed to smooth out cash flow bumps and provide extra working capital, you are welcome to contact Interface for more information, phone 0800 438 434.