Ways to manage cash flow.

Cash flow management is a vital part of every business and can be influenced by so many factors, so it’s vital to keep on top of this. Here are a few tips to help you manage your business cash flow.

Manage stock levels - Don’t hold too much stock, work out what you need at any given time, give yourself a buffer for any restocking delays and reorder when you’re running low. There’s no point in having cash tied up in stock that’s sitting in a warehouse or storeroom.

Negotiate with your suppliers - Discuss payment terms with your suppliers. Longer payment terms are better for you, but not necessarily so for your supplier. Friendly negotiations can often lead to more favourable terms.

Forecasting - Plan ahead with all known income and expenditure to see if there are any periods where cash will be running low and come up with a contingency plan. It’s much easier to deal with problems before they arrive rather than reacting to them.

Get paid on time - We’ll expand on this in another post, but there are a number of actions you can take to ensure you get paid on time, one of which is hiring a bookkeeper!

These are a few things to consider when trying to stay on top of cash flow. If you need some help with this or have any questions then get in touch.