Cash flow management

Tips for business cash management

• Make realistic estimations of your business’s cash needs on a daily, weekly and monthly basis, and set your budget accordingly. It can be tempting to overspend sometimes, but ensure you stick to your budgets as best you can. Communicate this clearly with your bank manager.
• Offer a variety of payment methods to your customers - credit card facilities, and online payment services such as PayPal, are vital for boosting cash flow. Early settlement incentives such as discounts can also encourage customers to clear their invoices in good time.
• Invoice a client or supplier as and when a job is completed, rather than waiting till the end of the month to send invoices for all of the preceding month’s work. 
• Always monitor which payments are outstanding, and send firm reminders to these clients about their payment obligations; if not yourself, assign these responsibilities to an experienced, reliable employee within the company.
• Credit avenues, such as business loans and overdrafts, are a viable short-term solution for when cash flow is slowing down. However, this should not be seen as a long-term cash flow solution, and you should not let your company fall into the position where the day-to-day running of the business is reliant on these credit incomes.