With costs rising at rapid rate of knots, it’s unsurprising to hear the biggest complaint for all businesses is the impact on their cashflow.

With that in mind, here are our top 8 tips to help manage your cashflow:

  1. Create a budget and stick to it:  this means it needs to be realistic and you need to be honest about tracking your expenses so you are not overspending.
  2. Increase your income:  consider new ways to increase revenue such as offering new services, finding new clients, increasing your prices (which you should be doing anyway as your costs have most likely increased!) or asking for a payrise.
  3. Reduce expenses:  identify any unnecessary expenses or review them to see if they can be lowered to eliminate or reduce your monthly outflow.
  4. Improve your accounts receivable:  implement a more timely invoicing schedule and follow-up promptly on overdue payments.
  5. Manage inventory:  keeping inventory levels as low as possible reduces the amount of cash tied up in stock (allowing for delayed delivery times etc).
  6. Negotiate payment terms:  consider negotiating more favourable payment terms with suppliers to improve your cashflow.
  7. Consider lines of credit or loans:  if necessary consider obtaining a line of credit or loan to bridge cashflow gaps – just remember, you’re borrowing against future earnings so you need to be disciplined in making sure the balances are repaid.
  8. Monitor your cashflow regularly:  regularly review your cashflow statements to stay on top of your finances and make adjustments when and where they’re needed.

Poor cash management is the key reason why many businesses fail so close monitoring and timely action can help to avoid financial difficulties and maintain the stability of your business.