4 Quick Tips for a Consistent Flow of Cash for Your Working Capital

Planning your cash flow

4 Quick Tips for a Consistent Flow of Cash for Your Working Capital

When it comes to maintaining a profitable business, you can never tell when you will hit a dead end. The only way of getting out of a scenario like this is having some savings in your bank because the money stopped flowing in. You can improve your finances if you use a cash flow planner. This is a simple sheet that shows one row with all money you expect to flow in your business in future.

Seeing the money coming in and out instantly is a subtle sign that you will return in hurdle. To make sure it keeps from happening, you need to improve your cash flow with proper planning. To help you start, we are giving you a few valuable tips

Keep It Simple

There is no need of fancy software to plot your cash flow. You can easily start with your bank statement and credit card. You need to see the money flowing in and out, mark the dates on thecalendar and track your money. If you don’t know when you will have a receivable income, or your expenses are out of control, you need an estimate of your total expenses. You have to get precise to take control of your finances.

Details

Advanced cash flow planners give you details brief of your income, and respective expensive. This helps the accountants, but you want to know how your month will go, you have to total your income cash in a single lump sum, and treat your expenses as outgoing cash. More importantly, you have to learn the difference between these two.

A Timeframe

When you start a business, it will be a few months before you see any profit. You have to plan your cash flow and learn the different patterns. There are many companies which have set their mind for the upcoming three to five years.  To get working capital, you have to look far ahead to see an opportunity and plan to grab it.

Keep the Cash Flowing

A good cash flow goes hand to hand with proper cash flow management. To make sure you have constant cash flow with working capital, you need to follow these pro tips!

  • Collect the money you are owned, contact your customers and remind them of their balance. The problem is many business owners never contact the clients about their payment. To inspire your clients paying off early, offer a discount, or other benefits
  • Make your clients pay electronically or through a credit card. It’s important because electronic transfers are made in couple of minutes where a cheque can take weeks to process
  • Pay your bills, plan your working capital and negotiate terms with your suppliers in advance
  • You need to sell the most to your best clients. You need to understand that getting new business is very costly, and if you are running a tight ship, you better stay in contact with your old clients, and continuously make new offers to make a sale

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