{"id":937,"date":"2019-04-22T23:26:47","date_gmt":"2019-04-22T13:26:47","guid":{"rendered":"https:\/\/sage-new-clone.local\/en-au\/blog\/?p=937"},"modified":"2026-02-05T20:13:30","modified_gmt":"2026-02-05T09:13:30","slug":"ways-stay-top-cash-flow","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-au\/blog\/ways-stay-top-cash-flow\/","title":{"rendered":"10 ways to stay on top of your cash flow"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\t10 ways to stay on top of your cash flow\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"Ashley\t\t\t\tAshley Thompson<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n

Cash flow is one of the biggest issues facing start-ups. Recent research reveals Australian small businesses are chasing $76 billion in unpaid customer bills and according to the Australian Securities and Investment Commission, poor cash flow was the key factor in half of all tech firm failures in 2016.<\/p>\n\n\n\n

So how can you manage your cash flow more effectively? Here\u2019re ten ways you can stay ahead and in control of your finances:<\/p>\n\n\n\n

1. Set up a credit control system<\/strong><\/h2>\n\n\n\n

Your credit control system needn\u2019t be complicated \u2013 it\u2019s really all about getting paid as soon as possible \u2013 but it\u2019s essential to put some procedures in place. The basics include setting clear credit limits and payment terms for your customers, sending out invoices promptly, and firmly chasing all debts when due. To help speed up the payment process, ensure you list the correct payment details on sales invoices and offer multiple payment methods. You should also stay on top of customer payments and be quick to stop offering credit to bad payers.<\/p>\n\n\n\n

2. Forecast sales<\/strong><\/h2>\n\n\n\n

Sales forecasting is all about predicting what\u2019s ahead so you can prepare for cash flow peaks and troughs. You can start forecasting as soon as you have a month\u2019s sales behind you. To work out future demand, use your market knowledge. Think about your pricing, the level of competition, the state of the economy, and so on. Remember, it\u2019s better to be cautious than optimistic \u2013 that way, you\u2019ll hopefully avoid nasty surprises.<\/p>\n\n\n\n

3. Cut unnecessary costs and spend<\/strong><\/h2>\n\n\n\n

When it comes to preserving cash flow, think lean and mean. Scrutinise every item you buy, know exactly where your cash is going, and always get value for money. Work out what you really need, too \u2013 those office pot plants might look nice but they won\u2019t grow your business.<\/p>\n\n\n\n

4. Negotiate good terms with suppliers<\/strong><\/h2>\n\n\n\n

It\u2019s always worth investigating to see if you can extend payment terms with suppliers. If you can settle your bill in 60 days or even 90 rather than 30, you can hold on to your money for longer, which helps regulate your cash flow. <\/mark>If you\u2019re thinking about making a big order, don\u2019t miss the chance to negotiate. Could you set up a regular payment plan for example rather than paying off outstanding amounts in one go?<\/p>\n\n\n\n

5. Manage stock intelligently<\/strong><\/h2>\n\n\n\n

Monitoring stock closely and only ordering what you need is essential to avoid unnecessarily outlaying cash. Work out what sells quickly and profitably in order to keep income steady and make sure you\u2019re not tying up funds in slow moving items. If you\u2019re looking for a quick cash injection, try selling off old or outdated stock at a cheaper price.<\/p>\n\n\n\n

6. Don\u2019t tie up cash<\/strong><\/h2>\n\n\n\n

If you have orders coming in, it\u2019s always tempting to purchase the latest equipment or \u2018nice to have\u2019 items. Think wisely before splurging on excessive purchases and try to hold on to liquid cash. If you\u2019re buying assets like computers, ask if the supplier will offer a finance deal over a year or consider taking out an overdraft.<\/p>\n\n\n\n

7. Stay on good terms with lenders<\/strong><\/h2>\n\n\n\n

It pays to stay on the right side of the bank. Always keep your books up to date so you can show your figures, just in case you need to borrow. If you\u2019re struggling with repayments, talk to your lender rather than burying your head in the sand.<\/p>\n\n\n\n

8. Try using invoice discounting<\/strong><\/h2>\n\n\n\n

This is where a third party \u2018buys\u2019 your invoice and releases cash based on its value. It won\u2019t suit every business model but it\u2019s often a good option if you\u2019re growing. Some lenders will give you up to 90% of the invoice amount, but fees can be high so always shop around.<\/p>\n\n\n\n

9. Spot the warning signs<\/strong><\/h2>\n\n\n\n

A drop in turnover, customers taking longer to pay, incurring late penalties from the ATO, and being forced to settle supplier invoices later than usual are all classic signs of poor cash flow. Don\u2019t ignore the warnings. It\u2019s generally easier to work out ways to increase working capital before you\u2019ve built up a lot of debt.<\/p>\n\n\n\n

10. Be realistic about your business<\/strong><\/h2>\n\n\n\n

Sometimes you need to take a step back to see things clearly. If you\u2019re always struggling and your cash flow statement is poor, ask yourself why. Are your sales too low? Are your products poorly priced? Can you chase payment more quickly? Be level-headed about your venture and its future \u2013 if you\u2019re not making a profit, you might need to rethink things.<\/p>\n\n\n\n

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Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t
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