Cashflow Tools for a Resilient Business
During times of uncertainty, as we are currently facing across the globe, it makes business and financial sense to have a robust cashflow strategy. Cash can mean the difference between a small business surviving or not.
Here are some ways to understand and gain control of your cashflow:
- Reconcile your bank regularly
Recording the bank transactions on a weekly or daily basis means that your accounts show accurate data. Reports will therefore be more meaningful, putting you in the best position to make key decisions about your business.
- A key part of a healthy cash flow is managing when your customers pay you.
Understanding how long it takes customers pay you is key to managing your relationship with them and protecting your cashflow.
Reviewing your payment terms and looking at strategies for collecting money more effectively from customers, may also be useful. Cloud accounting software can be a great support in putting the key controls and measures in place, for example with electronic invoicing including 'pay now' links, and automatic reminders to customers with overdue balances.
- Cashflow apps can help you forecast your cash needs in the long and short term.
A business needs enough money to cover its commitments and operate effectively. It should also understand, how long it can operate for without further money coming in, should the need arise.
Apps such as Float and Fluidly can work with your cloud accounting software to help you review your company's cashflow for the coming months and years. This forecasting allows you to see when cash may be short in the future and look at scenarios that could improve or worsen this and work out how to address any shortfall.
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Understanding your cashflow position allows you to take action to ensure there is enough money in the business before you run out. Equally, looking at your cashflow can be a useful tool in deciding whether your business needs to tweak its offering and even pivot in order to survive.
If this sounds like something you'd like help with, Get in touch.