Cash flow management is one of the most important aspects of running a business. So important, in fact, that it could mean the difference between your venture sinking or swimming. Understandably, small business owners lack the financial resources of larger companies, including dedicated finance teams, legacy systems and set protocols.
Thankfully, getting your finances on track could be easier than it seems. In this post, we’re sharing 7 important tips for improving your cash flow management in 2019.
Track Your Time
In any business, it’s important to track the time you spend on various tasks to map your productivity. What do you spend the most time on and is this helpful for your business? If you’re spending a large amount of time each day or week on meaningless tasks or those that you hate doing, then it’s taking valuable time away from your business. Alternatively, if you’re spending a large chunk of your business hours tracking your finances, then it may be time to outsource these tasks to a professional (or utilise one of these helpful resources).
Did you know that there is a tonne of accounting technology available for you to use, including those which are free? This ranges from cloud-based accounting solutions such as Xero or Quickbooks, to apps such as Receipt Bank, which allows you to quickly capture and organise your expenses by snapping a photo of your receipt. When it comes to managing your cash flow, don’t look past the wonderful technology available to you.
Automate Where Possible
There are many aspects of your business that you can automate, including sending invoices and payment reminders. Not only does this free-up time for you to concentrate on other important tasks, but it also means that you are on-top of your customer’s invoices and payment reminders, increasing your chances of being paid on time.
Embrace Paper Where Possible
While we advise you to embrace technology to keep on top of your cash flow, you also shouldn’t look past more traditional methods such as paper. Sending out paper invoices or payment reminders in addition to electronic ones further increases your chances of being paid on time (therefore assisting with your cash flow).
Keep On Top of Your Invoices
Speaking of customers paying on time, it’s vital that you also keep on top of all of your invoices to ensure speedy payment. After all, how can you expect your customers to pay on time when you aren’t ahead of this yourself?
Don’t Be Afraid to Chase Up Late Payments
When it comes to invoices, they are either current or overdue. This is an important fact to keep in mind, as it will increase your chances of chasing up customers effectively. Some small business owners can get embarrassed or scared about asking a customer to pay their bill, however this is something you will have to get over pretty quickly if you’re running your own company. Don’t leave an unpaid invoice for an additional fortnight or month after its due date. Instead, chase up payment the same day it becomes overdue.
Ask For Financial Advice
Sometimes, it pays to ask for professional financial help, especially if you’re struggling with cash flow management. It’s understandable that some small business owners will be fearful of being charged a small fortune. Many accountants and financial advisers, however, are quite affordable. It doesn’t hurt to pick up the phone and ask, as some even offer free consultations.
As you can see, cash flow management is a vital part of any successful business, therefore it’s important that you improve your skills within this area. Thanks to these 7 tips, you’ll be on top of your cash flow management more than ever in 2019.
For more information to help you run a successful small business, check out the following articles:
- Tips for Surviving Your First Year in Business
- Working Capital: What is it and Why Does Your Small Business Need it?
- 25 Ways to Grow Your Small Business Fast
Looking to boost your business cash flow? Call 1300 00 LUMI or visit our website to see how an unsecured business loan can help you.