Posted On: 1st November 2012
1. Plan, plan, plan! Prepare cashflow projections for next year, next quarter and, if you’re on shaky ground, next week.
2. The key to managing cashflow is to be aware of any problems as early and as accurately as possible. Financial services providers are wary of borrowers who suddenly need to have money today.
3. Finance problems can often be self-inflicted. It seems obvious but companies which send out incorrect invoices often find that their customers end up returning an invoice and requesting a new one.
4. Protect yourself against bad debts. Bad debt protection cover provides clients with protection for up to 90% of any loss suffered by reason of the failure of a debtor to pay, owing to insolvency or protracted default.
5. Balancing credit terms vs cashflow needs is something many businesses struggle with. Be sure to tell your potential customers upfront about your credit terms - before you provide your product or service.
6. Don’t always associate higher sales with better cashflow. If large portions of your sales are made on credit, when sales increase, your accounts receivable increase, not your cash.
7. You may be able to raise cash by selling and leasing back assets such as machinery, equipment, computers, phone systems and even office furniture. However, you could lose your assets if you miss lease payments.