Cashflow can easily get out of hand and some studies suggest that financial mismanagement is one of the top causes of business failure. Here are 4 tips to help get cashflow under control – remember it is an on-going requirement!
1. Plan for the ups and downs
Be aware of when lean cashflow patches are coming up and plan accordingly. Avoid major purchases from your business’ working capital unless you are sure you have cash to cover it. A cashflow budget will help you see this – eg revenue down on forecast (eg the average monthly required).
2. Have finance products working to your benefit
Overdrafts, premium funding, lease facilities and cashflow funding products can all be excellent tools to help boost a business’ cash. Even the business credit card can be a good way to ease the squeeze as long as you are sure the debt can be paid before interest kicks in, which is the best way to handle credit cards!
3. Avoid vehemently – tax and other statutory penalties
Save the money and the stress!
4. Keep your hands out of the till
Make cash drawings for personal purposes as minimal and following conservative cashflow forecasts.
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