Efficient Cash Flow Management Practices
Cash flow management doesn’t need to take up hours each week. Implementing simple practices that may take up to 15 minutes on a Monday morning can change your business.
Contact NLJ Partners today to assist you in implementing the right cash flow management strategies for your business.
Here below are some tips to help you get started.
- Monitor and Forecast Cash Flow:
- Regularly track and predict cash inflows and outflows.
- Anticipate and plan for potential cash surpluses or shortfalls.
- Create a 12-month Budget:
- Develop a 12-month budget outlining expected revenues and expenses, ultimately helping maintain control over cash and financial planning.
- Optimise Accounts Receivable:
- Manage accounts receivable efficiently to accelerate cash collection by minimising delays in customer payments.
- Negotiate Favourable Payment Terms:
- Negotiate payment terms with suppliers to optimise cash flow and extend your payment deadlines to manage cash outflows effectively.
- Minimise Unnecessary Expenses:
- Review and eliminate non-essential expenditures to preserve cash, improving profitability by reducing unnecessary costs.
- Maintain an Emergency Fund:
- Keep funds aside to cover unexpected expenses or emergencies, providing a financial safety net during challenging periods.
- Optimise Inventory Levels:
- Manage inventory efficiently to reduce carrying costs and ensure inventory turnover is efficient to free up cash.
- Maximise Cash Flow from Operations:
- Focus on enhancing operational efficiency to generate consistent cash flows.
- Utilise Technology for Cash Management:
- Employ modern cash management tools such as your accounting software, Xero, and other technologies for better financial control.
- Review Revenue Streams:
- Exploring multiple sources of revenue to reduce reliance on a single revenue source, enhancing overall cash flow stability.
