Undoubtedly, your business relies pretty heavily on the money it brings in. After all, turning a profit and staying afloat is what owning a business is all about. As such, you probably already know that cash management- the process of balancing money earned and money spent and hopefully bringing in more than you spend- is vital to a business. If you can’t handle your cash properly and manage your money, your business is likely doomed for failure.
When you have managed your cash well, on the other hand, your business will undoubtedly grow and improve, which is what you want. In order to help your business achieve this type of success, it may be a good idea, especially if you have had trouble with cash management in the past, to hire a professional cash management team in order to assist you.
Having a qualified, experienced cash management team working for you will reduce the number of bad debts your business has, keep your company’s image positive, and most importantly of all, keep your bank account in the positive as well! This can also make it easier to find investors; after all, people are eager to invest in a successful, booming business- not so much in one that’s barely staying afloat or that isn’t even breaking even!
Whether you hire an outside cash management team or not, there are some tips that can be useful for you as you seek to improve your cash flow and overall cash management. Read them and put them into practice, or, if you’re hiring a cash management team, make sure it does these things as part of its regular routine!
Tip #1: Don’t Count Just Your Working Capital in Your Cash Flow
To begin with, don’t make the mistake of counting ONLY your working capital when you add up your cash flow. If you do that, it’s likely the figure you end up with is going to be pretty depressing! Instead, count in things like payments to suppliers, payments of operating costs, and any other money going in and/or out of your business to come up with your “cash flow” figure; it will be much more accurate that way.
Tip #2: Make Predictions
On a regular basis, you should take the time to make (as accurate as possible) outflow and inflow predictions, which you can base on current figures and past figures/trends. Making these predictions on at least a monthly basis will give you an earning goal to aim for and help you to accurately assess how your business is doing and where and how it can improve. If you take advantage of predictions as a learning opportunity, you can really take what you learn and put it into practice to boost your business.
Tip #3: Put Some Cash Aside
Finally, make sure you put some cash aside for a “rainy day” in the world of your business. Just as you put money aside for use in the event that life throws some unexpected and unwelcome surprises your way, you should do the same for your business. If you go through a bad month or have to buy a new machine or other supplies out of nowhere, you don’t want to go completely broke. Having money set aside can really help your business to survive the tough times.
As you can see, proper cash management can make all the difference for your business. Hire someone else to handle your cash, or do it yourself; either way, do it well, and your business will thrive! #CashManagement