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Setting cash flow target for coming six to 12 months helps to provide an accurate outlook of the business. It is the best way of controlling business financial activity, especially for small business units to maintain and predict a cash flow forecast.

Managing Cash Flow is nothing but setting targets for the credit controllers to bring the business to the desired level of success in a planned manner. An entrepreneur knows it is not so easy to hit and beat this as per the level of satisfaction. Here will we suggest you some tips and tricks to manage the Cash Flow affairs for small business units.

The things which every business owner should consider while managing Cash Flow are as follows:

  • Easy and transparent payment terms
  • Generating quick Invoice
  • Avoid complex payments process for customers
  • Fixed rate payment Offer packages for the clients
  • Payment turnaround time
  • Regular updating with the bank
  • Continuous cash flow monitor by a trained employee
  • Cash flow management technology

Let’s discuss it one by another…

  • Easy and transparent payment terms

Management of the cash flow starts with formulating and implementing a clear payment term. This will help you to know about the overdue payment and when you are going to be getting paid. For instance, if you get the payment from your project within 30 days then you can establish the same payment term in which you make payment to your employees and suppliers right in 30 days.

  • Generating quick Invoice

Next advice to manage the cash flow and get cash quickly from the customers is to invoice the customer as soon as the work is completed. Any delay in sending the invoice may cause further delay in getting the amount in the bank account. So issue the invoice to the client in no time keeping a record of evidence for future.

  • Avoid complex payments process for customers

Online payment is a better option nowadays. If you make your payments through check, it will cause a delay in the clearing which ends with a further delay in arriving cash to the bank account. So always prefer to be paid online by account transfer.

  • Fixed rate payment Offer packages for the clients

Offering a fixed rate payment packages to your clients for the services is a better option. It can assure you a predictable income from the source at the end of the month. This will help you in managing your spend strategy. Many entrepreneurs use the traditional hourly payment rate but you cannot expect a fixed return on the same.

  • Payment turnaround time

There is a time lag between invoicing a customer and getting payment. Every business owner wants to minimize the gap to get quick money. We suggest to implement direct debit approach instead of upfront payments. This really minimizes your payment turnaround time for sure.

  • Regular updating with the bank

Keeping the bank informed about the significant financial matter is quite vital to establish a flawless financial system in your enterprise.  Further, you can get much financial assistance for your business requirements like credit or overdraft. Being in touch with your bank helps you to reconcile your accounts.

  • Continuous cash flow monitor by a trained employee

No matter what business you are doing but cash always is the king. Tracking the business fund coming and going is very important. There are several unpredictable sources from where the money comes into the business. So to have a perfect grab on the same it is a good idea to make a trained office manager to keep an eye on the same. Thus you can make sure that your business will always have sufficient cash in the bank.

  • Cash flow management technology should be used

We suggest cloud-based accounting is the best solution to manage your business information. It is a structured way of recording the information and retrieving them for future use. This is the biggest time-saver for any business. This allows you to free up time and work effectively with a better control over the business cash flow.

We the Outsourced Bookkeeping is the experienced accounting offshore service providers. We saw more than 90% of the small business does not follow a proper cash flow plan from the very beginning which lands up with early business failure. Focus on cash flow is better than to focus on profit. Profit is the ultimate aim of every business but a good cash flow is needed for the business to survive.

Comment (1)

  1. Sarah P
    November 20, 2018

    It’s true! So many business owners struggle with managing cash flow. Unfortunately, this can lead to many businesses failing during their first couple of years in operation. Great tips!

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