Cash flow is a very important aspect of your business, some would say it is the lifeblood of your business. So, it’s very important to be proactive with cashflow management.
You will always want your cash inflows to be greater than your outflows. This is a positive cashflow position which gives you the liquid cash needed to improve and grow your business.
If your outflows start to exceed your inflows, this can leave too little cash. This can result in inability to pay vendors, increased debt and could be detrimental to your business.
Cashflow is a living, ongoing process that needs to be constantly tracked and monitored. You will need to act on numbers that you see in your cashflow statements.
There are several factors that would cause a negative cashflow. These could be slow sales, poor cost management or invoices being paid slowly, or not at all. A solution to the issues mentioned is to become proactive in the management of the company’s cash situation.
Here are a few ways to boost your cash position:
- Make it easy to get paid by using the latest in payment technology such as Bill.com or PayPal
- Track and manage debts by following up on late payments to reduce aging
- Manage spending more effectively by tracking, reviewing and reducing your costs.
- Improve your sales and marketing
If managing cashflow is a headache for you and your business, this would be a great opportunity to have a bookkeeper help you control the positive cashflow position you and your business desire.