cash flow

Business owners are constantly reminded of the frightening statistics surrounding the number of businesses that fail due to poor cash flow.

Successful cash flow management involves regulating the money flowing in and out of your business. An increased, consistent cash flow is not only the lifeblood of a business but also creates a predictable business pattern, making it easier to plan and budget for future growth.
myaccounts consultants are trained to assist you with Cash Flow forecasting and discuss strategies to improve your business Cash Flow. 

Holding debtors costs you money.

To value the money tied up in your debtors you have to look at the opportunity cost of those funds. The $ tied up in your debtors is money that you could have used to pay your Credit Card, mortgage, or even earn interest in YOUR bank account. Do not be a bank for your suppliers - and if you are, act like a bank and charge interest... include this in your price. You have been financing this money.

Quick tips!

Improve your business cash flow by:

  1. Make your customers pay upfront (either a deposit or in full)
  2. Make recurring customers pay via regular direct debit, so they cannot forget to make a payment.
  3. Provide an incentive for paying on time but make sure this is factored into your pricing.

Follow up clients who have not paid by the due date. If you do not have time to do this yourself, you should seriously consider using our service. Receivables Management ia core component of all our on site packages

There are a number of things that you can do to improve your receivables. 
The faster your receivables turn over, the more capital you'll be able to spend on growing your business.

  • Invoice early and often
  • Shorten your terms from 30 days to 21 or 14 days. You'll get paid earlier - before your supplier's bill is due!
  • Regularly chase outstanding debtors
  • If you use credit terms - enforce them.
  • Issue monthly statements
  • Telephone contact with old debtors may give better results than reminder letter
  • Plan and save for when you're larger bills are due
  • Put away your GST collected more often
  • Have a cash flow budget and stick to it.

Remember, the faster your receivables turn over, the more capital you'll be able to spend on growing your business.

 
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May: 'Health Check Your Business' & 'Alternatives for Cash Flow Finance'

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