Cash flow management is essential to the success of small businesses. Cash flow refers to the amount of money that is coming into, and going out of, your business. If the amount of money coming in is greater than the amount going out, you will have a positive flow and probably a profit. However, cash flow can be irregular, so it is essential to manage your cash flow well and know your upcoming expenses – bills, wages and taxes will still need to be paid on time. Here are a few tips for managing your small business cash flow.
1. Use accounting software
Unless you are a trained accountant, cash flow and bookkeeping are likely to be new to you. With all the things you need to learn when running a new business, accounting is something you probably don’t have time for. However, there are many options available to help you, and accounting software can easily allow you to keep track of your cash flow without you investing significant amounts of time into recording it manually.
2. Always get paid on time
One of the best ways to ensure your cash flow remains healthy is to get your customers to pay on time, leaving you without any creditors. With money coming in as soon as you issue invoices, you will be able to cover the costs of your goods and services, while also making a profit and covering your overheads. Online invoicing software can offer customers simple one-click payment options, so consider making the payment process easier for them to help your cash flow.
3. Spread out your expenses
Small businesses incur a lot of expenses, and may not be able to cover large expenses all at once. Instead, see if you can spread your payments over a period of time. This will allow you to manage your cash flow better, having more cash on hand at any one time – payment plans are often an option and can always be negotiated, so talk to your suppliers directly and see what they can offer.
Small business cash flow management – where to find out more
At Tower Leasing, we are experts in all aspects of finance and business growth. Read about the alternative forms of finance we can help you obtain, including cash flow for your small business. Please contact us today if you’d like to discuss how we can help.