Running a business is tough. Not only do you have to come up with an incredible idea that’s going to get your customers racing to your door or website – but you also have to figure out how to keep on top of all the numbers and finances that keep your company afloat. Anything from a shortage of work to the rising cost of materials, could have a serious impact on your ability to run a successful business.
While you can’t necessarily protect your business from drops in orders or a lack of demand – there are things that you can do to keep yourself safe and prepared during the everyday running of your company. Keeping on top of your cash flow can give you the control and confidence you need to keep moving forwards when everything around you seems uncertain.
So how can you be the boss of cash flow in your business?
1. Plan and Prepare
The worst thing any business can do – no matter if it’s large, or small – is to fall under the impression that it has no way to control cash flow. Don’t leave the success of your business entirely in the hands of your customers. After all, you can influence what kind of jobs you take, how much you pay for the materials that you use, and what you charge for your services. Planning and preparing can make sure that you’re well equipped for handling the natural dips and troughs that arise in the running of a business.
Look carefully at your business, and your needs, and make decisions based on the context of your company. For instance, a big job might seem to be more profitable – which is great for putting cash in the bank – but if you need money for supplies in the next two weeks and a big job might take months to complete, it might be better to look elsewhere.
2. Keep Your Bookkeeping Up-to-Date
When there are so many different chores to think about within the process of running a business, bookkeeping can be one of the easiest tasks to forget about – particularly if you’re one of the only people in your company dealing with money and finances. Unfortunately, if you fail to maintain and manage your books, your lack of time could come back to haunt you. Don’t disappoint yourself in the long-run by discovering that you could have potentially fixed a cash-flow problem earlier with just a bit of bookkeeping.
If you really don’t have time to keep up with the records yourself – which is the case for many businesses today – hire someone who can do it for you. Virtual bookkeeping can offer a useful and cost-effective solution to companies that need to find a quick way to deal with their income. What’s more, with virtual bookkeeping solutions, you can keep up-to-date with transactions in real-time, which can make it easier to make sudden decisions regarding cash flow.
3. Invoice Correctly and Get Paid on Time
Making sure that your bookkeeping is done, and that your finances are up-to-date can be the first step in ensuring that your cash flow continues to run smoothly. The next step is making sure that you get paid on time, by invoicing as quickly as you can. Automatic invoicing solutions like Xero can help you to make the most of the invoicing process, and even remind customers that money is due when they fail to pay immediately.
Chasing up customers to get the cash that you are owed is one of the most annoying, and frustrating parts about running a business – but it’s essential if you want to be successful.
When you invoice quickly, you can let your customers know exactly when you expect to be paid. Ensure that your requirements are laid out quickly in the invoice, and let your clients know exactly what will happen if they fail to pay after the due date has passed (without sounding too threatening).
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