Good cash flow management is essential in every small business if it is to succeed and grow. Our guide includes expert advice and tips to give you the confidence when it comes to managing your cash flow for your business.
As any small business owner or adviser will tell you, cash is king. It’s a well-known saying but what exactly does it mean?
Put simply, businesses go bust in the long term through lack of profit, but in the short term, they fail because they don’t have enough cash to pay their bills. Cash flow is the life supply of any business – more firms go under because of cash flow problems than anything else.
The principles of good cash flow management are straightforward. First, you’ve got to make sure you’ve got more money coming in than going out. Money also needs to come in on time, so you can pay suppliers and invest in new stock.
Having access to cash gives you better buying and negotiating power, which could save you money long term.Anticipating any shortfalls in funds is important, as this allows you to make contingency cash flow plans such as extending credit.
Managing money and cash flow are critical for small firms. But if you can get the basics right, you’ll be in a strong position.
Our guide offers advice on how to get a clear picture of your cash flow:
- How to stay on top of your cash flow
- Credit control and sales forecasting
- Negotiating good terms with suppliers
- Spotting the warning signs that you might have a cash flow issue
- Increasing sales through customer feedback
- How to boost your profit
- How to ask people for money
Recommended Next Read
Checklist: Create and use a profit and loss (P&L) statement
The 10 tips for staying on top of your cash flow
82 percent of businesses fail due to poor cash flow management. Discover how to go from having a cash flow challenge to smart money management.