How can I improve cash flow for my business?
Cash Flow Management for businesses is as important as ever.
Ben Hutchesson, a Chartered Accountant from the Geelong Mulcahy & Co office, discussed the best ways to manage your cash.
As anyone in business would know, cash is the lifeblood of the company. Having poor Cash Flow Management can therefore lead to businesses lacking the funds to survive.
Ben discusses three main areas of a businesses’ Cash Flow Management; managing your accounts receivable, managing your accounts payable and managing inventory.
Ben’s first tip is that looking at only your profit is not beneficial to managing your cash flow.
“As long as you’ve got profit then yes the business looks like it’s not going under,” he said.
“However, because your profit takes into account your debtors, creditors and other factors that don’t necessarily translate into cash, focusing on that alone is not going to benefit you in managing your cash.”
Areas a business needs to focus on as well begins with managing debtors effectively so that cash keeps rolling in. Making sure you have a cash reserve for a rainy day is also vital.
Thinking outside the box can be beneficial to boost sales. Ben says marketing through offering incentives, hosting events for clients or staff, anything that can advertise your business will help with cash flow.
For anymore advice on Cash Flow Management, contact Ben or any of our accounting staff at Mulcahy & Co.
- By Ollie Nash
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