Cash flow is a vital part of any business. If you have too little cash available you cannot invest in your business or even, sometimes, do basic things like buying more stock or pay for basic marketing campaigns.
You need to take cash flow seriously and do everything you can to maximize yours, and here are a few basic cash flow rules that will help you do just that:
Keep your books up to date
If your accounts are not up to date, it’s easy to lose track of your cash flow, and before you know it things have gotten out of hand because you simply don’t know how much you have coming in and going out. Not only that but updating your books regularly will make it easier for you to do your taxes accurately and on time too.
Schedule regular invoices
Invoicing regularly is a good way of ensuring that you have regular payments that come in, and using invoicing software is the easiest way to do that because you can pretty much automate most of the process, and a machine is less likely to forget about an important invoicing date than you are, so there is that too.
Chase up non-payers
If a client has not paid on time, you need to chasse that up as soon as possible by sending them an invoice reminder. If you’ve lost track of who has paid and who has not, that is not a good position to be in, but this hospital contract management software company, and similar software for other industries is ideal for keeping you informed and quickly highlighting which clients you need to chase up. Taking formal action against s pon-payer is never fun, but sometimes it is necessary, so you should not be scared to do so if it means you get your cash flow back in equilibrium.
Review your spending
Of course, money coming in is only one part of the cash flow equation – if you want to have a healthy cash flow in your business, you need to consider the money that is going out too. That’s why you should regularly audit your company’s spending. Taking account of every single cent with a view to seeing where you can make savings. Often, switching to a cheaper supplier or using freelancers instead of full-time employees, and things of that nature are all you need to cut your expenditure and maintain a healthy level of cash flow, but you can only work that out by first taking stock of where you are spending right now.
Ensure your business accounts are separate from your personal accounts
Last, but by no means least, you should always aim to separate your business and personal accounts. Fail to do that and the waters could easily become muddied and you could end up inadvertently spending business money on personal stuff and vice versa. Not only could this impact your cash flow, but it could also get you in trouble with the IRS! Avoid!
Follow these simple rules and get control of your cash flow once and for all.