Cash flow is possibly the most important single element in the success of your small business – if you do not have enough cash available to pay bills and wages, you will soon be unable to trade. These are three tips for staying on top of the cash flow situation.
Putting together forecasts of your cash flow for the upcoming year or six months will give you a clear outlook on the situation for that period. Professional accountants in Goole or wherever your firm is based can help you with this if the management of finances is not your strong suit.
Set firm payment terms
You should set firm and clear terms for payments. This includes both customers and suppliers paying you money owed, and your business paying its employees and bills. Common practice is to make 30 days the limit for payment of both, and following this rule will let you plan for incomings and outgoings to ensure continued cash flow.
Invoice on time
You should really be sending out invoices for work completed as soon as it is done, rather than waiting, so you get money owed as quickly as possible. Invoices should also be sent by email, so the recipients get them straight away. Furthermore, using that method will mean you have records of all invoices you send.
At Adaptive Accountancy, we offer round-the-clock help and advice to small businesses on cash flow and other relevant matters. Give us a call today to get more information about how we can support your business.