Cashflow is the lifeblood of a business. Money is always coming in and going out, and keeping tabs on the movement of money is one of the primary ways you can keep your business healthy. If your cashflow is off kilter, it can lead to overdrawn accounts and extra bank fees. Good cashflow management is vital, and here are several tips for improving how you manage your cashflow.
Create a Cashflow Forecast
You may not be able to predict your cashflow with perfect accuracy, but you can develop a good picture of the trends your business experiences over time. Having a forecast or target cashflow number can help you make sure you have enough cash coming in to meet expenses at any given time. Start by tracking real cashflow numbers accurately, and then set targets for yourself to meet. Track the results of your forecasting too, so you know when you are on target and when you are off. Over time you will gain a good picture of your cashflow and will learn what kind of cashflow you can expect at different points in your business cycle.
Pay Attention to the Details
Cashflow is not an area of your business which benefits from a loose hand. On the contrary, the more closely you keep an eye on your income and expenses, the better your chances of improving your cashflow and avoiding financial issues. This is especially true if your income is irregular. Keep a close eye on your daily expenses and track your finances scrupulously. If you always know where your money is going, you can make sure you have money where you need it to cover all expenses.
Learn what kind of technology is available to help with cashflow management and then make use of it. If you have a lot of cash in your business, invest in money counting machines to make the process of counting cash faster and more accurate. Both note counters and coin counters are available, with many options to suit your business's needs. Research accounting software to find what best fits your needs. If you need simplicity and flexibility, look into cloud-based accounting services. If you need more complex accounting abilities, look for an installed software package that can provide you with the right feature set. Whatever technology you choose, make sure you can understand it well enough to use it. Software and machines don't help if they don't get used.
Get Help From Your Bank
Some banks offer great business services like overdrafts and credit to help protect you from unexpected bumps in your cashflow. Investigate all of the services your bank offers and shop around to make sure you are getting the best possible banking service. Make a point of keeping in contact with your bank about any issues that arise, even if you have unexpected expenses that will make your accounts tight for a few days. If you stay on good terms with your bank, they may waive fees or offer credit on good terms to help you even out your cashflow.