When it comes to improving company cash flow, the solution boils down to two things: regulating income and keeping control of outgoings. With that in mind, there are steps you can take to ensure an even flow, rather than floods followed by droughts.
Knowing how the cash flows through your company will help you keep it steady. That means you need information that is accurate and updated regularly concerning cash flow forecasts, budgets and debts. Either buy good accounting software or bring in professional accountancy services in South Yorkshire or wherever your business is located.
Understand and negotiate payments
Your clients will usually have particular payment dates each month and your credit control should factor these in. That way, you avoid missing a payment and having to hold out until the following month. However, you should also try to persuade them to pay earlier, perhaps by offering a discount as incentive for this, and make sure you have a procedure for chasing overdue payments.
Diversify where possible
If the demand for the service or product your company offers is heavily impacted by the time of year, diversification will help to maintain year-round cash flow. For example, if you provide lawn care services, there will be much less demand in the depths of winter, but you could transition to offering ice and snow removal services at that time of year.
At Adaptive Accountancy, we have been advising businesses about their cash flow for nearly a decade. Get in touch today for details.