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Five rules for managing small business cashflow

By 04/09/2018September 21st, 2018No Comments

Getting Started

Invoicing is part of good cashflow management. Once you’ve delivered a product or service, don’t wait to invoice. That can hurt your cashflow and your business. You should get into the habit of sending invoices for payment quickly. If you are providing a service, think about asking for a deposit upfront, or a payment part-way through. It’s a reasonable request.

Five rules for managing your cashflow

1

Keep your books accurate and up to date

Your cashflow is only as good as your accounting and reporting. Make sure your accounting information is updated regularly.
2

Don't be too lenient with your customers

Be direct and fair without being a pushover. A clever but polite invoicing strategy will usually get you a long way
3

Keep a close watch on your accounts receivable turnover at all times

If it’s trending up, it might be time to step up your efforts at chasing payment. As receivables age, their quality goes down, so you should act sooner rather than later.
4

Build a cash reserve

Access to cash will make or break your business. The ultimate step to managing cashflow like a pro is to build a cash reserve. A cash reserve provides the cushion you need to manage unexpected events.
5

Keep your business and your personal finances separate

This is essential if you want to understand your business cashflow and forecast how it might change. Mixing your business and personal finances can leave you uncertain about business
performance.
Get in touch with us today to find out more about CBHC can help you with your business.

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