Good cashflow management is at the heart of all successful businesses.
That’s why Onstop.co.uk, the online company dedicated to reducing bad commercial debt, has put together its top tips to help you manage your cashflow effectively.
1. Make sure that you monitor your income and expenditure carefully so that you can see easily who owes you money, and who you owe money to. You can do this by keeping an invoice book and records of payments you have received on an Excel spreadsheet. If you do not monitor your cashflow you have no hope of managing it.
2. Budget carefully so that you do not spend more than you can afford to.
3. The saying, ‘old is gold’ is particularly relevant when it comes to cashflow management. If you have a customer who always pays promptly make sure that you build a good relationship with him/her by providing first rate customer service. Remember, it’s easier and cheaper to keep and existing customer than it is to find a new one.
4. Make sure that you know what your break even point is. If your income is higher than your expenditure you are in profit and the way round means you are making a loss. If your income and expenditure are balanced you have reached your break even point.
5. Don’t pay your bills before they are due. Having said this, you should always pay on time as failure to do so can damage your reputation and ability to negotiate good payment terms.
