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Amidst rising supplier prices, it is crucial to manage your business's cash and understand how money moves. These tools are essential for staying strong and adapting well to succeed flexibly.
Fund flows show the cash coming in and going out of a business. By tracking these flows, owners can learn about specific product/service health and overall market trends.
Some businesses struggle more with cash flow problems than others. If you are a business owner, you might wonder where your business fits in. No matter how simple or innovative your business is, cash flow issues can still pop up. Here's how to handle cash flow in your business:
Start by checking your accounts to understand how funds move. Look at your recent profit and loss statement to ensure your income covers expenses. If your profit is falling behind expenses and cash flow slows, it's time to act. Create a funds flow statement to track where your money goes.
Then, make a yearly budget to spot periods where cash might be tight. Plan to save during quieter months. Consider flexible work schedules, new products/services, or other ideas to manage those slow times.
Lastly, ensure you collect owed money promptly. Encourage customer loyalty with early bird discounts. Set clear credit limits and payment terms. Run credit checks for new customers. Penalise late payments and ask for upfront deposits or payment.
Talk to us about preparing a funds flow statement and annual budget so that you can work on your business for maximum success.
Brearley & Co Accountants are pleased to offer a free, no obligation, initial consultation with one of our experts who will be happy to discuss your business needs and how we can help you.Contact