Published on June 7th, 2019 | by Sunit Nandi0
5 Top Tips To Keep Your Cashflow Flexible
In business ‘Cashflow Is King’ a phrase you’ll no doubt have heard many times before, but what does that actually mean? Well it’s a fact that most businesses suffer tight cash-flow situations at one time or another, where you are running out of funds but not necessarily in financial trouble, for example you are low on cash but are owed a lot of money or have jobs to be completed that will bring in money. Here are some hints and tips on how to avoid these small issues becoming bigger ones.
Make Use Of A Business Overdraft
It is not uncommon for a business to use an overdraft facility to provide extra funds temporarily to see them through any tricky periods. It is one of the most simple forms of borrowing as when funds are low and money is requested in any way, by transfer, card payment or even cash withdrawal then these will be honoured. Be aware that this is not the best lending vehicle for long term borrowing though as interest rates can be a little higher than some others.
Ask For Customer Deposits Upfront
If you run the type of business where you are doing work for customers or working on large projects it is not uncommon to ask for a deposit up front or even for staged payments as certain sections are completed or targets met. This way you are covered for any costs of implementing the work and the customer is also covered as they have a balance left to pay only when they are happy the project has been properly completed.
Buy Vehicles On Finance
Vehicles can be one of the most expensive items your business might be likely to purchase. Particularly since the need for a vehicle replacement can occur without little warning in the case of a breakdown or accident and this can hit your cashflow considerably. These days it’s very easy to buy a car on finance spreading the cost over the longer term
Use Company Credit Cards For Employee Expenses
If you have employees who have to make purchases on expense it can be easier to issue them with credit cards for this purpose. Not only can you set limits on each card but you can track easily what each employee is spending each month. You will then have a short period to wait before you have to pay the bill and can therefore avoid playing any interest on the balance.
Don’t Take On Too Many Projects At Once
Another piece of good advice is not to over extend yourselves financially by taking on too much work at the one time as this will leave you having to buy too much in terms of supplies before you are paid for the work. Having a bit of a waiting list is no bad thing as well as it will show that you are a firm in demand and are worth waiting for.