- How effective is your business at managing cash flow?
- Are you able to accurately forecast cash shortages?
- Do you know how fast you can afford to grow?
Growth sucks cash! The better you manage your cash position the faster you can afford to grow.
Here are 5 tips for improving your cash position:
1) Ensure you have a proper and accurate cash flow forecast
If cash is tight this should be broken down weekly and updated 1 – 2 times a week.
2) Review your credit control process
Is your process unstructured and informal? Review your process, paying special attention to: who owns it, your credit terms, various stages of escalation and your ‘on stop’ policy.
3) Have your daily cash position and debtor numbers reported daily
This way you can monitor progress and keep on top of potential problems.
4) Set daily or weekly invoice targets
Some businesses sit on invoices due to poor communication and/or ineffective processes. A daily target will focus you and your team.
5) Renegotiate terms with your suppliers
This is particularly effective if you don’t have credit accounts with key suppliers or if you have considerable or growing spend with your suppliers.
You know what they say: Turnover is vanity, profit is sanity, but cash is KING!
What can you do to improve your cash flow?