Here are some tips we wanted to share with you for managing cashflow. At CBC, We are committed to providing our clients with a strategic cost effective results-driven service that adds value to their businesses. And we know how vital a role cashflow plays in the life expectancy of any business.
1) Bill as soon as work has been done or order fulfilled. Add late payment charges or fees where possible. Stick to sound credit control practices – and train your staff in proactive debt collection methods.
2) Reduce direct and indirect costs and overhead expenses and negotiate extended credit from suppliers, wherever possible. Think… ‘Does it save money or bring in income – if not I don’t need it!
3) Increase sales (particularly those involving upfront deposits, and regular standing order payments). Offer discounts to customers who sign up for regular standing order payments. The time you save in chasing debts can be used to work to increase more sales.
4) Make short-term and medium cashflow forecasts and update them daily. (Using pen and paper, spreadsheet, accounting tools or whatever works for you!)
5) Establish an effective relationship with your Bank (and Accountant. This will help if you need an overdraft, need to renegotiate bank facilities to reduce charges or seek to extend debt repayment periods. Register for realtime online banking, so as to get an accurate picture of your bank balance, your overdraft limit, and what funds are cleared.
We believe in running a tight ship, cutting out waste and making our resources work efficiently. See Real Business – 27 ways to improve your cash flow: Cash is the fuel that every company runs on. Here are tried-and-tested tactics for filling your tank.