Managing Your Cashflow

Keep on top of your cashflow

Cashflow is vital to the health of any business, otherwise, it’s unlikely to prosper without enough cash to meet immediate and future needs. Therefore, understanding your cashflow should be a key priority to clearly see the amount you owe, what you’re owed from customers and how much money you have in the bank.

With a healthy cashflow, your business will be in a better position to help you grow, launch new products or services, pay wages, and take advantage of supplier discounts. There are a number of accounting tools you can use to help you, such as Xero, Quickbooks and Wave.

Improving cash management

By focusing on your cashflow management you’ll be in better position to manage your costs, reduce financial and operational risk and improve operational efficiency. Good cashflow management means you’ll need to review business and financial information on a regular basis by looking at:

The creditworthiness of your customers
The payment patterns of your customers
The level of receipts outstanding

Download our guide on how to improve your cashflow

The payment terms provided by your suppliers
What short-term demands you have on cash and any surpluses
The position of your debt capacity

Making your credit control effective

Effective credit control is important to running a successful business and putting in place proper procedures can help to ensure that customers are paying on time and flag early indications of potential bad debts. The recovery of business debt can be time consuming, so the key to getting paid on time is having an effective credit management policy.

To make sure your credit control is effective, you can put in place some simple processes:

To avoid surprises later, put in place a purchase order system
Send invoices to customers on time and to the right person
Clearly highlight your payment terms on invoices
At the outset, do a credit check on customers and set appropriate credit limits

Where possible, ask for payments in advance
If an account becomes overdue, get in touch by email, letter and in person to chase for payments
If, after a further 30 days your payment is still outstanding, decide if you should put further work on hold until the payment has been received
Each month, regularly check your debtor days

Finance to improve your cashflow

There is also the option to use a cashflow finance specialist, who will be able to provide a more flexible source of funding that matches your business requirements:

Factoring: where you combine funding and credit control
Confidential Factoring: where your funding and credit control service is confidential
Invoice Discounting: where you access funding only and not a credit control service

Talk to a member of our team today on 01-297-4911

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Keep on top of your cashflow

Finance to improve your cashflow

Talk to a member of our team today on 01-297-4911

or

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