Managing your cashflow
January 28th, 2008 | by admin |To stay in business, companies of all types and sizes must manage their cashflow. Too little cash in the bank and serious implications can follow. There are some simple tips to managing your cashflow that successful business follow.
- Invoice promptly - you’ve done the work or committed to doing it, so request payment.
- Stick to budgets - don’t spend money you don’t need to.
- Chase outstanding Invoices before they become overdue
- Offer early payment incentives to customer - A 1% discount on prompt payment can be worth it in the long run.
- Avoid customers who pay slowly or not at all - not all customers are good customers.
- Schedule payments to provide a smooth payment plan - it allows you to plan and maintain a healthy bank balance.
- Get organised - don’t plan on the back of an envelope
All sound like common sense - and often preached in Business 101 at college. So why, do many businesses fail within the first couple of years of their existence and why do even successful high turnover businesses experience cashflow problems during their lifetime?
Its all about planning and being in control.
TravelManager is currently developing a number of tools which will help the small business owner manage their cashflow better. We are currently testing our purchase order module which will allow you to see where you are spending your cash and graph where and when it is going.
We will be launching this functionality over the next couple of weeks.
Regards
Mike
