As a small business owner, you’ll be constantly thinking about your cash flow. However, there are ways to make the whole process smoother, such as forecasting, saving and implementing cash flow software. Below, our experts have compiled some tips and tricks to help you manage your cash flow.
One of the best ways a small business can manage its cash flow is by forecasting, which requires you to calculate potential risks that could cause an imbalance in your cash flow. A simple way of doing this is setting up a replica spreadsheet on Excel and entering and deleting inflows to represent things that could go wrong in the future. Using this information, you can start to plan for potential events and consider how you’d respond to them. For example, if a client is dragging their feet when it comes to making a large payment, what resources do you need in place to handle the shortfall in the profits?
Save for a rainy day
One of the biggest benefits of forecasting is that it can show you what your breakeven point is (this refers to how much money it takes to fund your capital needs). However, if your forecasting is a little off and you’ve been hit harder by an unexpected issue than you were anticipating, having a savings pot to tie you over can prevent your cash flow from being disrupted. Rest assured you don’t need a large sum of money to get started – putting some surplus cash into a savings account will see you earn money through interest payments. In the long run, this may prevent you from having to rely on your overdraft or business loans when you’re going through a tricky period.
Use cash flow software
It always helps to have another set of eyes looking at your finances, and this is especially true when it comes to your cash flow. Using good cash flow software, in particular, can help you run and manage your business more efficiently. The software can also take much of the responsibility off your shoulders, allowing you to focus on running your business and bringing in more money and customers.
Cash flow management – find out more
Every company can have cash flow shortages or perhaps there is an opportunity that cannot be missed but you don’t have the capital to support it – either way we have a number of solutions to help. We have a wealth of knowledge and can navigate what is a complicated market place. There are many options to choose from; unsecured, secured against property, secured against debtors or invoices, short/long-term etc. Our team members can advise and offer guidance so you don’t miss out. For more guidance on how small businesses can manage their cash flow, visit our Alternative Finance page or feel free to contact our team at Tower Leasing today.