Cashflow forecasting is an important tool for seeing where your business is heading. By estimating what your future sales and expenses will be, you can make better decisions for your business and work towards your growth goals.
Cashflow forecasting shouldn’t be something you do once a year and forget about. You should continually check in with your cashflow forecast, update it and make sure you’re still on track.
Here are 6 ways to stay on track with your cashflow.
Reliable accounting software will help you keep on top of your finances and allow you to more easily analyse key business metrics.
It’s important to regularly review your income and expenses to see where there’s room for improvement.
Good monitoring tools will also help you spot potential cashflow bottlenecks and other issues early, giving you time to make a plan and mitigate the damage.
Chat with the Lawrence Group team about our recommendations for the best tools to monitor cashflow.
Send invoices for products and services straight away to avoid delays in getting paid. Depending on your business, this could be when an order is placed or immediately after a product is delivered.
Figure out what makes sense for you and create routines to help speed up the process. Automated systems can help make things faster.
Also make sure your customers don’t have to jump through too many hurdles to pay you. Make it straightforward and easy for them to send you a payment, and they’ll do it more quickly.
If it’s taking a while for your invoices to be paid, review the payment terms and consider reducing the collection times.
It’s a good idea to do this while also providing incentive for your customers to pay faster. For example, you could consider a late payment fee or offer a discount for early payments.
Having a good pricing strategy is crucial for running a sustainable business. It involves more than adjusting the cost of your products or services.
You should also consider how your pricing impacts client relationships and how it affects people’s perceptions of your products.
Reducing prices might help increase cashflow for some businesses. For other businesses, raising prices or redesigning pricing packages is a better strategy.
If you’re struggling with sales, it’s a good idea to get professional advice about pricing strategies that could work for your business.
Reinforcing behaviours that improve cashflow for your business can help encourage your staff to do them more. For example, you could offer rewards for meeting sales targets or implementing strategies to reduce costs.
A lot of money can be wasted on marketing that is not done well. It’s important to understand your target audience and create marketing campaigns that are specific to them.
Review previous marketing campaigns you have run to see whether they have been a good investment. Seek professional advice about ways to improve return on investment (ROI) for your marketing efforts.
As always, the above information is general in nature and may not be suitable for your circumstances. If you need help keeping cashflow on track for your business, give the Lawrence Group team a call today on (08) 9433 3288 to see how we can help.