Trying to run your business without managing your business cash flow is like aiming an arrow in the dark. According to Edmonton accountants, you must keep an eye on all the incomes and expenditures to make sure your business is going in the right direction. If you are looking for tips on how to manage your business cash flow, here are a few of them.
Record Your Cash Flow
Record each and every income and expense conducted by your business and maintain a cash flow statement. Don’t miss out in recording any transaction as it can lead to misrepresentation of numbers. Recording each transaction will help you understand the cash flow and help in understanding your business’s financial position better.
Clear the Invoices on Time
This is a two-way thing. As soon as your work is completed, send invoices and ask your clients to clear them soon. Make sure you communicate with your clients, give them the details of your invoices, and ask them to make payment. You can consider offering discounts for early payments as well.
Same way, if you receive invoices from suppliers and investors, make sure you clear them on time too. This will prevent you from attracting any penalty or interest rates.
Make Use of Online Modes of Payment
Cheque payments can take a little longer for the payments to get cleared and facilitate cash inflow. Hence, provide easy and faster modes of payments option such as payments through credit/debit card, online payment, and mobile payment. These modes of payment will help you obtain cash faster.
Pay Taxes on Time
Pay your business taxes on time. If you fail to pay all the taxes in time, you might have to pay penalties which leads to unnecessary waste of business funds.
Don’t Overstock Inventory
If you are into a manufacturing business, don’t manufacture inventory well in advance. Only manufacture inventory and goods that are needed. Similarly, if you receive your inventory from a supplier, don’t overstock them. You never know what may happen in the future. The order may even get delayed or cancelled that may lead to huge losses for your business. Moreover, overstocking results in excess storage and warehouse cost. Hence, order and hold inventory that is actually needed.
Managing your business cash flow is not a simple task. You need to record transactions, keep a check whether payments are made on time, manage your receivables, and ensure you have sufficient cash available in case of an emergency. If you need any assistance to manage your business finance, you can consider consulting professional firm to help with financial controller services. Also, you can contact the Edmonton accountants to seek their professional assistance in managing and recording your daily transactions.