Credit facilities are extremely tight and limited for many businesses in the current business environment, customers find it difficult to pay and suppliers are impacted as a result, and so the cycle is recreated in the supply chain, therefore creating difficulty managing and maintaining positive cash-flow for all.
The following are a few tips to assist a positive cashflow management within your business:
Review your costs carefully on a monthly basis or weekly basis depending on the business; a positive cash flow is more achievable with this approach. Business owners need to focus on managing the timing of their outgoings and managing the bank facility. Debtor/creditor management is essential for all business owners.
Create your forecasts for costs and revenues over a certain time frame, taking into account the guaranteed revenue, rank them and the anticipated revenue; this will give you a good understanding of how cash-flow will stack up. Know what your commitments are to the stakeholders in your business.
Manage your customer debt
A detailed working of Debtors will identify your income timing and highlights how long the debt is outstanding. Following up on debtors in a consistent and structured format and agreement and re-agreement of payment terms maybe necessary. To assist in getting older debts paid, incentivise it for your customer. This will help keep the cash flow positive. Incentives such as percentage reductions for customers who settle accounts in a short period.
Loyalty programmes are important and so too are your agreements, repeat business is easier to maintain than gaining new business in most cases. Relationship in the current times is very important, customers and suppliers need to understand your terms and you theirs, the negotiation of this is important to the business. Be ahead, plan, record and implement a cash-flow policy within your business and adjust as your business requires.
If you require assistance in any of the areas discussed above please do not hesitate to contact AAL business and financial advisors, based in Clonmel on 052-6137775; email firstname.lastname@example.org and see www.aal.ie