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Cash flow management
The document provides tips for small businesses to improve cash flow management. It recommends extending payment terms and improving cash collection. It also suggests analyzing expenditures and forecasting cash flow regularly. Some key tips include keeping only key suppliers, paying suppliers on time, offering discounts for early payment, pursuing outstanding debts weekly, and ending relationships with customers with poor payment histories. The document stresses the importance of forecasting cash flow at least weekly and reviewing forecasts against bank statements to improve over time.
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Cash flow management
- 1. Cash Flow Management MadeSimple Extend Improve Payment Cash Terms Collection Analyse Forecast Expenditure Regularly
- 2. Most small businessesonly just manage to keep their heads above the water.
- 3. They struggle topay employees and debtors.
- 4. If they followeda few simple steps they could:
- 5.
- 6. and spend moneyon revenue generating projects.
- 7. Top tips tokeep your cash flow positive
- 8. Keep your suppliersto a minimum, it is better to have a few key suppliers.
- 9. Use your increased spendingpower to leverage better payment terms.
- 10. Set up arobust payment authorization process.
- 11. Pay suppliers ontime, but not earlier than necessary.
- 12. If possible payyour suppliers after you have been paid by your customers.
- 13. Credit check allcustomers before doing business with them
- 14. Offer a discountfor early payment
- 15. Consider a factoringcompany to guarantee fast payment
- 16. Make sure thatyour payment terms and payment due date are on every invoice you issue.
- 17. Run a reporton all outstanding debts on a weekly basis and pursue all outstanding debt.
- 18. Get senior managementinvolved in cash collection process with long-term debtors.
- 19. Provide your customerswith as many payment options as possible.
- 20. Consider ending yourbusiness relationship with customers with a bad payment history.
- 21. Small Businesses shouldforecast their cash flow at least on a weekly basis.
- 22. When preparing acash flow forecast you must remember cash and profit are not the same thing.
- 23. You could makea profit, but still lose money.
- 24. Your cash flowforecast should contain an estimate of when you think will be receive money into your business and when you will have to pay out.
- 25. Each week ormonth you should review the forecast against your bank statement.
- 26. This will helpyou pick up on any variances or discrepancies and will improve your forecast in the future.
- 27. Contact Us forhelp with Managing Cash Flow www.arinobe.com [email protected] +44203 286 7829 +447825 002 908 arinobe_sme arinobe_sme