In today's financial climate, small and medium-sized enterprises (SMEs) can find it tough to compete with bigger businesses, especially when it concerns managing cash flow effectively and ensuring that the business stays afloat during the harder times.
With the current issues surrounding the COVID-19 pandemic and other wider issues such as worries over Brexit, managing the finances of your businesses are vital, and getting the right people to help you with this is the most cost-effective thing you can do as a business owner.
Benefits of managing your cash flow
Cash flow is quite simply the money coming in and the money going out of a business. In the most straightforward terms, businesses must ensure they have more money coming in than going out in order to stay afloat, and this is why you need to manage your cash flow well.
Hiring experienced brokers in the financial field can be a lifeline for SMEs and SME cash flow because they are qualified to be able to broker good deals on financing and make sure your accounting is up to scratch.
Techniques for better cash flow management
Better cash flow management can take a few years to get right. It can be a thorn in the side of business owners after the hard work it's taken to grow.
While they may be good at running the business, this doesn't always mean they are great at managing the financial aspects. Without expert guidance, this can be a huge disadvantage for SMEs from all industries.
Below is some advice to help you manage your cash flow.
1. Reduce Cash Flow Where Possible
The most effective way to manage your cash flow is to reduce your outgoings wherever possible.
While many companies shop around for better deals on parts and supplies, an experienced broker will be able to help you reduce your cashflow outings in different ways that you may not have thought about.
2. Organise Your Expenses
All businesses have expenses, but spreading them out across the months or financial year will make them easier to deal with than having them all come in as one lump sum.
3. Keep Your Accounts in Good Order
Half the battle of improving your cash flow is knowing the income and the expenditure and when each of those things is happening. Invest in good bookkeeping and dependable accountancy, and don't let this aspect of your business slide.
4. Have A Watertight Contract With Debtors
While you'd hope that all debtors will pay on time and in full, this isn't realistic in the real world. For this reason, your business must have a watertight contract and invoicing system, as well as open lines of communication with your debtors to ensure there are no problems when it comes to paying.
Business insurance can make a huge difference to your success with this and give you some options should things need to go down a legal route.
5. Be Open To Alternative Funding
6. Hire A Broker
Brokers can be a great option for businesses looking into other funding options and finding opportunities to release cash flow. A business cash flow loan, asset loans, and other business financing cash flow options can be confusing, especially for business owners who are not financially savvy. However, for an experienced broker like TSF Finance, this is the day to day work that will ensure they are good value for your business.
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