{"id":72596,"date":"2025-04-09T09:00:00","date_gmt":"2025-04-09T07:00:00","guid":{"rendered":"https:\/\/www.sage.com\/en-za\/blog\/?p=72596"},"modified":"2025-04-08T14:46:01","modified_gmt":"2025-04-08T12:46:01","slug":"cash-flow-management-tips","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-za\/blog\/cash-flow-management-tips\/","title":{"rendered":"How to manage cash flow in 10 steps"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-za\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tHow to manage cash flow in 10 steps\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2025-04-09T09:00:00+02:00\">Apr 9, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"How to manage cash flow in 10 steps\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-za\/blog\/cash-flow-management-tips\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-za\/blog\/author\/asavinwattanajantra\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2026\/03\/Asavin-350x350.jpg\" class=\"entry-author__image\" alt=\"Asavin\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2026\/03\/Asavin-350x350.jpg 350w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2026\/03\/Asavin-768x768.jpg 768w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2026\/03\/Asavin-810x810.jpg 810w, https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2026\/03\/Asavin.jpg 1000w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">Asavin Wattanajantra<\/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<p>Cash flow is the lifeblood of your small business.<\/p>\n\n\n\n<p>A healthy flow of cash in and out of your business means you can pay employees, suppliers, rent, municipal charges, taxes, and other operating costs on time.<\/p>\n\n\n\n<p>Getting this balance right isn\u2019t always easy. <\/p>\n\n\n\n<p>Having cash in hand lets you put money back into your business. <\/p>\n\n\n\n<p>Sometimes you need to spend money to make money\u2014on stuff like tools and tech, marketing, branding, and staff.<\/p>\n\n\n\n<p>In this article, we highlight how you can better manage your cash flow finances.<\/p>\n\n\n\n<p><strong>Here\u2019s what we cover:\u00a0<\/strong><\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#what\" data-level=\"2\">What is cash flow management? &nbsp;<\/a><\/li><li><a href=\"#h-why-is-managing-cash-flow-necessary-for-small-businesses-nbsp\" data-level=\"2\">Why is managing cash flow necessary for small businesses? &nbsp;<\/a><\/li><li><a href=\"#h-what-is-the-difference-between-revenue-and-profit-nbsp\" data-level=\"2\">What is the difference between revenue and profit? &nbsp;<\/a><\/li><li><a href=\"#manage\" data-level=\"2\">How to manage your cash flow effectively in 5 steps &nbsp;<\/a><\/li><li><a href=\"#h-why-is-financial-reporting-so-essential\" data-level=\"2\">Why is financial reporting so essential?<\/a><\/li><li><a href=\"#h-how-to-improve-your-cash-flow-in-5-steps\" data-level=\"2\">How to improve your cash flow in 5 steps<\/a><\/li><li><a href=\"#h-final-thoughts-schedule-time-for-your-finances\" data-level=\"2\">Final thoughts: Schedule time for your finances<\/a><\/li><\/ul><\/div>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Get your free cashflow template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Download our free cash flow forecast template to help you run your business and achieve your goals<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-7d24dde7-b594-451e-bf9a-d6e217e5ec61\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your template<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg\" class=\"single-cta__image\" alt=\"Mobile payment\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what\"><strong>What is cash flow management?<\/strong>&nbsp;<\/h2>\n\n\n\n<p>Your challenge is to manage the money coming in (accounts receivable) with the money going out (accounts payable).<\/p>\n\n\n\n<p>Ideally, you should be aiming for a consistent positive cash situation\u2014in other words, more money coming into the business than is being paid out.<\/p>\n\n\n\n<p>So how can you make sure you\u2019re managing your finances properly?<\/p>\n\n\n\n<p>If you haven\u2019t already, you should set up for better cash flow management.&nbsp;<\/p>\n\n\n\n<p>Basic record-keeping\u00a0can be dull, but you need to do it to keep track of money going in and out.<\/p>\n\n\n\n<p>Keep a record of all payments, bank statements and bills from all customer sales.<\/p>\n\n\n\n<p>You\u2019ll also need to keep records of money going out\u2014such as vendor and supplier purchases, and payroll.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Get your free cashflow template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Download our free cash flow forecast template to help you run your business and achieve your goals<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-7d24dde7-b594-451e-bf9a-d6e217e5ec61\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your template<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg\" class=\"single-cta__image\" alt=\"Mobile payment\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-is-managing-cash-flow-necessary-for-small-businesses-nbsp\"><strong>Why is managing cash flow necessary for small businesses?<\/strong>&nbsp;<\/h2>\n\n\n\n<p>When uncertainty hits, bigger businesses often have cash reserves to ride out the bad times.&nbsp;<\/p>\n\n\n\n<p>During the pandemic, for example, companies with business models that work when people stay at home (such as Amazon) thrived.\u00a0<\/p>\n\n\n\n<p>Smaller businesses are less likely to be sitting on a pile of cash and will lack the resources and backup plan to ride out challenging times in the same way.&nbsp;<\/p>\n\n\n\n<p>That\u2019s why you need to keep an extra-close eye on your cash flow.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-the-difference-between-revenue-and-profit-nbsp\"><strong>What is the difference between revenue and profit?<\/strong>&nbsp;<\/h2>\n\n\n\n<p>When reviewing your cash flow, it\u2019s crucial not to confuse your profits with revenue.&nbsp;<\/p>\n\n\n\n<p>Let\u2019s look at the difference between the 2 of them.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-revenue\"><strong>Revenue<\/strong><\/h3>\n\n\n\n<p>The amount of money that\u2019s come into your business from direct business activity (such as sales) or investors.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-profit\">Profit<\/h3>\n\n\n\n<p>The amount of money left over after you pay all expenses. <\/p>\n\n\n\n<p>Calculate profit by taking your revenue and subtracting your expenses from that number. <\/p>\n\n\n\n<p>If the amount of revenue coming into your business is the same as what is necessary to pay your expenses, you are not making a profit\u2014you are surviving.\u00a0<\/p>\n\n\n\n<p>If the revenue is less than what is necessary to pay expenses, you are losing money and risk failure.&nbsp;<\/p>\n\n\n\n<p>Your target is to make a profit, where revenue is greater than the cost of your expenses.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"manage\"><strong>How to manage your cash flow effectively in 5 steps<\/strong>&nbsp;<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-create-a-cash-flow-forecast-nbsp\"><strong>1.\u202f\u202fCreate a cash flow forecast<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Making regular and accurate cash flow projections is one of the most important things you can do to notify you of problems before they arise.<\/p>\n\n\n\n<p>You\u2019ll also need to make decisions based on good forecasting and estimates, so establish a cash flow forecast.<\/p>\n\n\n\n<p>Start by making a list of assumptions on which to base your forecast\u2014it should include a prediction of price increases for your raw materials and a look at what you\u2019ll therefore charge your customers.<\/p>\n\n\n\n<p>There should be a projection of the growth or reduction of your sales, considering issues such as the seasons and the current trading environment.<\/p>\n\n\n\n<p>You\u2019ll also have to factor in outgoings such as salary increases and the growth of other costs.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Get your free cashflow template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Download our free cash flow forecast template to help you run your business and achieve your goals<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-7d24dde7-b594-451e-bf9a-d6e217e5ec61\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your template<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg\" class=\"single-cta__image\" alt=\"Mobile payment\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-calculate-revenue\"><strong>2.\u202fCalculate revenue<\/strong><\/h3>\n\n\n\n<p>Once you\u2019ve got a reasonable idea of how your sales will go, you\u2019ll need to consider how much revenue this will bring in.<\/p>\n\n\n\n<p>Consider when you\u2019ll get paid for these sales.<\/p>\n\n\n\n<p>You might, for instance, have a regular customer who brings in a lot of business, but you\u2019ll need to factor into your forecast that they usually take 60 days to pay.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-identify-your-expenses\"><strong>3.\u202fIdentify your expenses<\/strong><\/h3>\n\n\n\n<p>These typically include wages and salaries, suppliers\u2019 costs, rent and municipal charges, directors\u2019 remuneration, and the purchase of new assets.<\/p>\n\n\n\n<p>You might need to add interest payments and insurance premiums. Use last year\u2019s bank statements as a checklist while anticipating new incomings and outgoings for the next 12 months, based on internal and external factors.<\/p>\n\n\n\n<p>You want to have a reasonably accurate view of your opening and closing financial position for a month, 6 months, and 12 months.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-review-your-finances-nbsp\"><strong>4.\u202fReview your finances<\/strong>&nbsp;<\/h3>\n\n\n\n<p>You never \u201cfinish\u201d a cash flow forecast\u2014for it to be helpful, you should constantly review and update it to reflect what\u2019s happening in your business and correct any assumptions you made when creating the forecast.<\/p>\n\n\n\n<p>It\u2019s also essential to stress test your projections.<\/p>\n\n\n\n<p>If sales suddenly fall by a quarter, for example, will you still be able to pay your essential bills? <\/p>\n\n\n\n<p>What will be the impact if you find that you need to repair or buy a new piece of equipment?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-manage-your-reporting\"><strong>5.\u202fManage your reporting<\/strong><\/h3>\n\n\n\n<p>When the pandemic threw so many businesses into confusion, it was easy to let financial reporting slip. And startups are no exception.<\/p>\n\n\n\n<p>Reassuring customers, handling suppliers, and managing staff\u00a0working remotely\u00a0is essential, but so is ensuring that your financial reporting is up to date. <\/p>\n\n\n\n<p>Otherwise, it won\u2019t be a true reflection of your monetary situation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-is-financial-reporting-so-essential\">Why is financial reporting so essential? <\/h2>\n\n\n\n<p>With it, you can:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Keep an eye on the financial health of your business\u2014something that\u2019s important during times of uncertainty and volatility.<\/li>\n\n\n\n<li>Make sure sales and other income, on the one hand, and your costs, on the other, are both correct.<\/li>\n\n\n\n<li>Pay regular attention to your profit and loss account (also known as an income statement), so you can check that you\u2019ve made a decent profit over a set period.<\/li>\n\n\n\n<li>Keep an eye on your cash flow statement (inflow and outflow), as this shows your viability in the short term and helps you manage your bills.<\/li>\n\n\n\n<li>See who you need to pursue most actively for payment and which of your creditors you\u2019ll need to pay first.<\/li>\n\n\n\n<li>Keep a sharp eye on your balance sheet\u2014so your assets and liabilities are accurate, detailed, itemised, and balanced.<\/li>\n\n\n\n<li>Get the information you need to apply for loans and investments.<\/li>\n<\/ul>\n\n\n\n<p>Include stock overview, asset register, aged creditor\/debtor, and sales\/VAT\u00a0 reports.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Get your free cashflow template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Download our free cash flow forecast template to help you run your business and achieve your goals<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-7d24dde7-b594-451e-bf9a-d6e217e5ec61\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your template<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg\" class=\"single-cta__image\" alt=\"Mobile payment\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-improve-your-cash-flow-in-5-steps\"><strong>How to improve your cash flow in 5 steps<\/strong>\u00a0<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-improve-your-receivables\"><strong>1.\u202fImprove your receivables<\/strong><\/h3>\n\n\n\n<p>Looking at your finances, you may notice that specific customers are taking their time in paying you.<\/p>\n\n\n\n<p>This can wreak havoc with your cash flow, especially if you\u2019ve spent money on materials and suppliers (like you might have to in the construction industry, for example).<\/p>\n\n\n\n<p>Look at ways you can improve the way you collect cash.<\/p>\n\n\n\n<p>You could take payments\u00a0<a href=\"https:\/\/www.sage.com\/en-za\/accounting-software\/invoicing\/\" target=\"_blank\" rel=\"noreferrer noopener\">directly from invoices electronically<\/a>, for example, and ensure your invoices are as well-formatted and look professional.<\/p>\n\n\n\n<p>You can incentivise customers to pay their bills by offering discounts if they pay ahead of time.<\/p>\n\n\n\n<p>Even if you take a minor hit in terms of profit, it can be better to get the cash in hand early.<\/p>\n\n\n\n<p>Watch out for customers with bad credit.<\/p>\n\n\n\n<p>Credit risk is part of doing business, but you can mitigate this by asking customers to complete an application before giving them credit. <\/p>\n\n\n\n<p>Making the sale may not be worth the pain and hassle of late payment.<\/p>\n\n\n\n<p>If necessary, hit them with interest charges outlined in a formal credit policy that clarifies the specific conditions you have granted them credit.<a id=\"_msocom_1\"><\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-drive-sales-and-experiment-with-your-pricing-nbsp\"><strong>2.\u202fDrive sales and experiment with your pricing<\/strong>&nbsp;<\/h3>\n\n\n\n<p>How you do this depends on your product or service, and demand.<\/p>\n\n\n\n<p>For example, you could increase your pricing if you believe customers will pay more. It may lead to reduced sales\u2014but you could make more money.<\/p>\n\n\n\n<p>You should research 3 areas for pricing:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your costs and what you need to make a profit<\/li>\n\n\n\n<li>Competitor pricing<\/li>\n\n\n\n<li>Pricing in your target market<\/li>\n<\/ul>\n\n\n\n<p>Equally, you could reduce prices or offer discounts. After doing your research, try to find that pricing sweet spot.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-manage-your-payables\"><strong>3.\u202fManage your payables<\/strong><\/h3>\n\n\n\n<p>It\u2019s not just a question of handling your money coming in. You need to manage what\u2019s going out. Here\u2019s how you can do that:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Cut unnecessary expenses. You don\u2019t want to pay for anything you\u2019re not using, such as software subscription fees.<\/li>\n\n\n\n<li>Cut any expenditure that isn\u2019t adding value and carefully look at your business costs.<\/li>\n\n\n\n<li>Look for ways to manage your payables more effectively. Moving to the cloud and using electronic payments will make it easier to track when money comes out. You can schedule your payments, so it won\u2019t hit your cash flow too much at a lousy time or take too much money out of your account at once.<\/li>\n\n\n\n<li>Keep a friendly line with suppliers and lenders, as it may help you negotiate better payment terms. They may be more flexible than you think, but they aren\u2019t going to help if you don\u2019t ask.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-review-your-finance-options-nbsp\"><strong>4.\u202fReview your finance options<\/strong>&nbsp;<\/h3>\n\n\n\n<p>You may hit difficulties. <\/p>\n\n\n\n<p>While the pandemic forced many businesses to look for loans and grants to keep going and manage vital functions such as payroll, today\u2019s changeable economic climate still has its challenges.<\/p>\n\n\n\n<p>Make sure you can survive cash shortfalls in the event of a cash crunch. Act quickly and decisively to turn around the situation\u2014follow points 1, 2, and 3 above to do this.<\/p>\n\n\n\n<p>Although your cash flow may look healthy, sometimes you need to take on financing to get extra funds.<\/p>\n\n\n\n<p>Maybe you want to expand your operations or need new equipment. You might need extra inventory to fulfil a massive order.<\/p>\n\n\n\n<p>Taking out a loan can be a good way of getting working capital if you are clear about the reasons for taking one and can pay it back over the full term (or early if you want to save on interest).<\/p>\n\n\n\n<p>Here is a quick rundown of some of your options:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-bank-loans\"><strong>Bank loans<\/strong><\/h4>\n\n\n\n<p><a id=\"_msocom_1\"><\/a>If you want to go down the traditional route, banks are a good way of getting a loan as you might have an existing relationship.<\/p>\n\n\n\n<p>However, they are possibly slower and more bureaucratic than high-tech providers.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-non-banks\"><strong>Non-banks<\/strong><\/h4>\n\n\n\n<p>Non-banks are financial institutions that are don\u2019t offer lending and depositing services.<\/p>\n\n\n\n<p>Non-banks generally have fewer requirements than banks. Technology like apps and internet communities means the lenders available to you are more diverse than ever.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-invoice-finance-and-asset-based-lending\"><strong>Invoice finance and asset-based lending<\/strong><\/h4>\n\n\n\n<p>Invoice finance and asset-based lending&nbsp;is especially useful if customers are slow in paying their bills.<\/p>\n\n\n\n<p>In a nutshell, invoice or accounts receivable financing enables you to use your unpaid invoices as security for a loan. You pay a percentage of the invoice amount to the lender as a fee for borrowing the money.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-invoice-factoring\"><strong>Invoice factoring<\/strong><\/h4>\n\n\n\n<p>With invoice factoring, you sell your unpaid invoices rather than wait for the client to pay, usually around 70% to 90% of their total value.<\/p>\n\n\n\n<p>Once the client has paid the factoring company the total amount, the factoring company then pays you.<\/p>\n\n\n\n<p>They\u2019ll charge you a service fee, usually around 1% to 5% of the total invoice.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-business-line-of-credit\"><strong>Business line of credit<\/strong><\/h4>\n\n\n\n<p>Also known as revolving credit, a business line of credit is where you borrow money either in one lump sum or several smaller amounts until you reach the agreed credit limit.<\/p>\n\n\n\n<p>Each drawdown becomes a separate loan to be repaid according to a repayment schedule.<\/p>\n\n\n\n<p>As with any loan, you pay interest. In this case, you repay each of the loans with interest.<\/p>\n\n\n\n<p>Unlike an overdraft, you don\u2019t have to go into the red on your bank account to access a line of credit.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Get your free cashflow template<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Download our free cash flow forecast template to help you run your business and achieve your goals<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-7d24dde7-b594-451e-bf9a-d6e217e5ec61\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your template<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg\" class=\"single-cta__image\" alt=\"Mobile payment\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2019\/04\/GettyImages-869866316-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-stay-on-top-of-inventory-management-nbsp\"><strong>5.\u202fStay on top of inventory management<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Ensuring you can meet your clients\u2019 needs while also avoiding cash being tied up in stock and paying out for storage is a difficult balance, especially when so much is uncertain in every sector.<\/p>\n\n\n\n<p>Effective\u00a0<a href=\"https:\/\/www.sage.com\/en-za\/sage-business-cloud\/accounting\/features\/stock-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory management<\/a>\u00a0is vital.<\/p>\n\n\n\n<p>As with financial management, regular forecasting is useful. <\/p>\n\n\n\n<p>Look at frequent communication with customers and suppliers, regular checks on market trends, and analysis of past sales.<\/p>\n\n\n\n<p>Here\u2019s a basic example.<\/p>\n\n\n\n<p>If you\u2019re running a grocery store, you\u2019ll need to keep an eye on the weather as it\u2019ll help you know when to stock up on barbecue food and accessories\u2014or hot chocolate and comfort foods.<\/p>\n\n\n\n<p>Here are a few points to think about:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.sage.com\/en-za\/sage-business-cloud\/accounting\/features\/stock-management\/\" target=\"_blank\" rel=\"noreferrer noopener\">Cloud-based inventory management software<\/a>\u00a0with real-time analytics is helpful, as is any system using data to help generate actionable insights.<\/li>\n\n\n\n<li>Tech can help you free up new storage space quickly, improving the opportunities for maximising any income potential for products you can\u2019t sell in the usual way.<\/li>\n\n\n\n<li>Adopt a \u201cfirst in, first out\u201d approach to minimise the chances of perishable stock going off or other items losing their seasonal relevance.<\/li>\n\n\n\n<li>Keep a closer eye on higher value items than those with less capital tied up in them.<\/li>\n\n\n\n<li>Anticipate reordering requirements so you can give suppliers some notice.<\/li>\n\n\n\n<li>Check your receiving process is fast and efficient. You don\u2019t want newly arrived stock getting damaged, going off, or sent to the wrong place for storage.<\/li>\n<\/ul>\n\n\n\n<p>At the other end of the process, make sure you dispatch orders promptly and carefully and ensure you\u2019re ready to dispose of dead stock.<\/p>\n\n\n\n<p>In addition to these practices, consider implementing cash management software to streamline your financial processes. <\/p>\n\n\n\n<p>This software provides real-time insights into your revenue, expenses, and overall financial health, empowering you to make informed decisions and maintain a consistent positive cash situation.<a id=\"_msocom_1\"><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts-schedule-time-for-your-finances\"><strong>Final thoughts: Schedule time for your finances<\/strong>\u00a0<\/h2>\n\n\n\n<p>Managing cash flow is vital to any business, but it is the difference between success and failure during times of uncertainty and volatility.&nbsp;<\/p>\n\n\n\n<p>With money to hand, your business can weather storms on the horizon and build a foundation for long-time success.<\/p>\n\n\n\n<p>Make time for your finances. <\/p>\n\n\n\n<p>Schedule an hour or two each week to work on your financial forecasts.<\/p>\n\n\n\n<p>Follow the points we\u2019ve suggested above, but don\u2019t forget to access professional advice whenever and wherever you feel it\u2019s necessary.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice enewsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-84fe79b5-668d-41f8-a0cc-6229018c4ac9\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2022\/04\/GettyImages-1181404518-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Managing your cash flow is key to running a successful business. Learn the basics of cash flow, and get expert tips on how to improve it.<\/p>\n","protected":false},"author":356,"featured_media":71329,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[25],"tags":[315,316,189,339,209],"business_type":[2],"lilypad":[],"context":[],"industry":[],"persona":[15,16],"imagine_tag":[63,353,68,83,85,86],"coauthors":[402],"class_list":["post-72596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-business-intelligence","tag-business-strategy","tag-financial-insights","tag-profit-loss","tag-staying-competitive","business_type-small-business"],"sage_meta":{"region":"en-za","author_name":"Asavin Wattanajantra","featured_image":"https:\/\/www.sage.com\/en-za\/blog\/wp-content\/uploads\/sites\/9\/2023\/09\/GettyImages-1413633547.jpg","imagine_tags":{"63":"Business intelligence","353":"Costs and cash flow","68":"Grow your business","83":"Growing business","85":"Small business","86":"Start up business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice South Africa","distributor_original_site_url":"https:\/\/www.sage.com\/en-za\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/72596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/users\/356"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/comments?post=72596"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/posts\/72596\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media\/71329"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/media?parent=72596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/categories?post=72596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/tags?post=72596"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/business_type?post=72596"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/lilypad?post=72596"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/context?post=72596"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/industry?post=72596"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/persona?post=72596"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/imagine_tag?post=72596"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-za\/blog\/api\/wp\/v2\/coauthors?post=72596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}