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Managing your cashflow
When you’re running any business, managing cashflow is nothing to sneeze at. In truth, you need to have a firm grasp on what money in coming into and going out of your business. If you don’t, it could have detrimental effects on the growth of your business or even shut it down altogether.
Cash flow forecast
Creating a cash flow forecast is a great way to organise and monitor your business finances. Here you can plot when payments to your business are due and when money is due to go out. This enables you to organise your payments so you don’t end up short, and you can immediately identify where you may run into difficulties. Try to update your forecast regularly so you keep on track and spot any potential problems early on.
Communicating with your clients
To prevent cash flow problems when it comes to your clients, you need to make your payment terms clear from the beginning; this may help prevent excuses further down the line.
It’s also important to make sure you’re invoicing as soon as possible and chasing up clients who have failed to meet a deadline. To maintain a good relationship, keep communicating with your clients and if possible figure out payment plans that work for both you and them.
Organise your payments
This is where your cash flow forecast really comes in handy as you know when payments such as expenses will be coming out your business so you can properly plan ahead.
If you’re feeling the squeeze, see where you can cut costs and save money in places that don’t impact your business. No matter how busy you are, make sure you’re always part of decisions on what your money is being spent on.
Like you do with your customers, having a good relationship with any of your suppliers will also help your business. It is more likely they’ll be more understanding with you if you have to make a one-off late payment or want to rearrange your payment plan.
Remember; when you’re planning your payments make sure you assess the status of each one in terms of urgency. Being properly prepared is the best way to keep your business organised. For help with business planning, check out more of our advice.
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