The COVID-19 pandemic has made doing business today more challenging. As a business owner, it’s time to go back to the drawing board and come up with an efficient strategy to succeed in the “new normal.”
One important tip to make a business successful is correct financial management, guided by a concrete plan. Financial management in business all boils down to cash flow management.
Cash Flow Management Tips for Small Businesses
Below are some cash flow management tips to help your small business:
1. Change the way you bank
Do you look at your bank account to see if your business has made money? But, if you only have one or two bank accounts, it is all in one big bucket so how do you know if there is enough money in that account to pay: yourself, employees, suppliers and taxes?
We work with a system that works from your bank accounts but provides you with the peace of mind that you will have enough money for everyone to come payday.
2. Focus on Profit First
Sales – Profit = Expenses. By focusing on Profit you will change the way you manage your business. Using the Profit First system we will assist you to step by step transform your business from a Cash-Eating Monster to a Profitable business that not only pays your suppliers on time but will pay you too.
3. Destroy Debt
Instead of increasing debt, good cash flow management will prioritise paying the debt off slowly over time while reserving funds for business growth.
4. Eyes on your books
Up to date bookkeeping is vital for managing cash flow. Knowing your numbers and ensuring the money is in the bank to pay everyone including the ATO ensures peace of mind helps prepare you for any pandemic or downturn in the economy.