Whether your business is brand new or established, ensuring your cash flow is maintained month in, month out is crucial.
Positive cash flow is the product of many different areas of your business working seamlessly together to perfectly balance money in and money out, as well as a forecast for future months.
Want to know how to support your business’ cash flow? Our team of experts have put together our top tips below…
Choose the right accounting software
Accounting software has come a long way in recent years and now comes with a whole host of features to make monitoring your cash flow simple. If you’re unsure of which software to utilise for your business, your Chartered Accountant can provide you with their expert opinion on which one suits your business’ requirements.
Understand tax requirements and opportunities
Knowing the ins and outs of your business’ tax requirements will provide effective insights into how you can operate in a more tax-efficient way. Should you be contributing to a pension fund? Are you eligible for R&D? Do you know your corporation tax liability? Knowing the answer to each of these can hugely benefit your cash flow in the long run.
Chase for payment promptly
One of the biggest contributors to poor cash flow is late payment by customers and therefore your business should have an experienced credit controller on hand to monitor and chase for payments on account as and when they fall due. Once again, accountancy software now make credit control that bit simpler with the option to make chasing for payment automated. However, don’t underestimate the power of picking up the phone and simply speaking to your client, more often than not this will resolve any issues swiftly.
There are many reasons why your client may delay paying an invoice, but one of the most common excuses is that an invoice is incorrect. Whether that be incorrect amount or details, it has been sent to the wrong person or does not clearly state how to make payment, your invoicing accuracy is critical to your overall cash flow.
Seek expert advice
Seeking advice from key contacts or third-party providers can prove invaluable in any area of business, but when it comes to your cash flow, your accountant should be your first port of call. They will have the insight, experience and knowledge on how your business can operate in the most cash flow positive manner, so don’t hesitate to pick up the phone or book in a meeting!
Want cash flow insights from the qualified team here at Ellis & Co.? Get in touch today on 01244 343 504.