Top tips for healthy cashflow

Every accountancy firm and business knows how vital cashflow is for success, therefore good cash management  practices should be top of the agenda. 

Our sister website BusinessZone.co.uk recently published a series of top tips, sponsored by Visa, for maintaining good cashflow. 

Here is a digest of the key points: 

  • Prepare and update cashflow forecasts
  • Go paperless 
  • Keep up-to-date with invoicing
  • Ask for upfront payment
  • Cut out non value add activity
  • Pay your bills as late as possible

Continued...

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Comments
futureb00ks's picture

Cash versus accrual

futureb00ks | | Permalink

 

First of all evaluate whether your business is a cash or accrual. Cash means there are no terms ie money is taken and spent and recognised immediately. This is often the case with restaurants. They take cash immediately from customers, and sometimes pay suppliers immediately. As soon as your business has terms, ie you lend credit or accept credit from suppliers, you become an accrual business.

Business consulting companies are accrual businesses. They have to extend credit to their customers, often up to 90 days.

In an accrual or cash based business, there is two things you can do to terms to tighten cash control.

1.       Reduce terms for customers. Ask customers to pay you faster. Credit cards are great for this. The credit card company settles with merchants within a few days, and ride the risk of the 30 days with the customer.

2.       Increase terms with suppliers. Ask your suppliers to give you a longer time frame to pay their debts. Negotiate fixed price agreements, minimum purchases, regular purchases in order to secure better trade terms.

Know your customers

Halex | | Permalink

I would also add that it pays to get to know the habits of your customers. For a business with fewer customers it can be an easy and worthwhile use of time to pick up the phone and find out what prompts actual payment of invoices. For all the policies and terms and conditions in place there are still many variants in the actual process, usually dictated by one or two key people. For the small business without a dedictaed credit controller it can become much easier to target those likely to respond to chasing if you know how the preocess works in reality. 

Tips for fitness!

Alston | | Permalink

According to me that running and morning walk is the best source for fitness ofthe body.It is very simple solution for reduce the extra body fat and weight.Mostly i like the exercise work and swimming for the weight loss of the body.  belmont fitness