New Years Cashflow Resolutions
By Adarsh Dutt
Organising Your Books
Disorganisation will mean you never know precisely how much income you have coming in and what expenses you have going out; not knowing if you are making a profit … or even worse … a loss. With the New Year just underway analyse your systems to sure it is as efficient as possible and providing you the most accurate correspondence of you cash inflows and outflows.
Get Rid of Bad Debts
Bad … Bad … Very Bad … Debts! These are amounts owed by customers that cannot be recovered and put your cashflow in a crippling state if you don’t have effective money collecting systems in place. One quick and easy solution to this is invoice financing, which can reduce the impact of bad debts on your cash flow and keep you focused on the tasks at hand.
Balance you Credit Terms
When your credit terms are out of sync with the credit terms set by your suppliers the imbalance forces a negative cash flow to arise and not only that but it worsens over time, making it harder and harder for you to bring the imbalance back to equilibrium. There are two core measures that can aid this; debtor finance and early settlement discounts.
Review Your Pricing
Lack of ability to price a product will lead to lack of cash, which will lead to lack of profitability. In essence no business can sustain a loss indefinitely and the pricing may need to be altered as it is a core reason many businesses are not able to attain profitability and positive cashflow.
Forecast your Cash Flow
Having the best estimated prediction of your inflows and outflows can help you plan effectively your companies movements going forward, because we all know that “Success is a planned event” .
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