Good Habits Improve Your Cash Flow
1. Monitor Your Transactions Closely
Stay on top of your transactions, make sure somebody in your business checks that the receipts & payments in your books match up to the bank account. Check:
● Is Cash being deposited according to the proper schedule
● Have your merchant services fees changed at all
● Are there any unauthorised payments from your account
Making a habit of doing daily review, keeping your records up to date & help you spot & rectify any mistakes quickly.
2. Track Every Single Expense
If you want to manage your business well, you need to track every single expense. This is easier to do if you have a separate business bank account; your business bank account or credit card will function as a basic accounting system and keep a record of all your transactions in one place.
Pay with a card, rather than cash, whenever possible because that automatically creates a record in your books, so you don’t forget to log the transaction.
3. Check Your Financial Data Monthly
Checking your transactions daily isn’t enough. At the end of each month, analyse financial data to identify trends that may affect your business.
Track your income monthly to see which areas of your business are growing & profitable, & which need improvement. Gather data to find out what generates the highest return on investment.
Going over your numbers each month will help you to see the bigger picture & understand how your business will fare in the long-term.
4. Invest in Right Accounting Software
Cloud based accounting software is no replacement for the services of a professional accountant or bookkeeper, but it can help take care of the grunt work, by helping to streamline the management of your financial documents, making it faster & easier to file & organise documents.
Accounting software automates a lot of your sales invoicing, & you can create a dashboard that will instantly tell you which clients haven’t paid, then automate invoice reminders along with automatically adding late fees to incentivise them to pay.
5. Hire a Professional
A professional finance person in your team will offer an insight into your current cash flow situation & offer advice on how to make improvements. A bookkeeper will save you time, money, protect your business from fines, fees & ease cash flow problems.
