Knowing what money you have coming in and what you have going out is critical in managing your cash. It gives you the ability to make confidant decision about the activity in your business and to seek help before its too late if required.
2. Automate Payments
Automating the receipt of your income can be a great way to take the stress out of debtor collection and ensure you are being paid on time. It also makes planning much easier when you have sureity over when you are being paid.
3. Analyse your Expenses
It can be easy to underestimate how much you are spending in your business. Take time each month analysing your spending habits and cut out anything that is surplus to your needs. Look at your financing costs, maybe you can talk to your bank about your interest rate or bank fees to get a better deal.
4. Understand The Deals You Make
It can be easy to look at the dollar value of a deal and ignore all else. Consider how quickly you will be paid job for jobs, and whether you have the capacity and skills to undertake the work in the first place. If the job isn't going to be profitable, or delayed payment terms will squeeze your cash flow, consider whether it is the best option for you.
5. Get Advice
It can be hard to crunch the numbers yourself, especially around the impact that tax will have on your cash flow. Even if you are well planned it can be worth talking to your accountant to get their opinion as they will have seen situations like yours before. Remember if you are having problems, many other have experienced the same and people are out there to lend assistance.
Remember that poor cash flow is the down fall of over 80% of small businesses that fail. Take action early and don't let this happen to you!