Cash Flow Management Services
Keep the cash flowing.
Keep your business afloat.
Running out of cash faster than expected?
Hard up for money when it’s time to pay bills or salaries?
Making a profit but have no cash?
Profit does not equal cash flow. In fact, businesses don’t generally fail from lack of sales, but rather because they run out of cash.
“Running a business without managing your cash flow is like driving at night with sunglasses on”
What we can do for You
- Prepare a customised cash flow forecast and budget for your business
- Weekly or monthly updated to your cash flow forecast
- Review variables that impact your cash in and cash out positions, eg. new product lines, new marketing campaign, future business plans
- What-if Analysis: Create and compare different scenarios or test sensitivities by changing the key inputs
We are able to integrate your cash flow forecast with Xero accounting software to provide you a real time view of your current and future cash position, giving you control and transparency over the cash flow in your business.
Comparison between Budgeting and Forecasting
| Budget | Forecast | |
|---|---|---|
| Create | Usually annually | Usually annually |
| Update Interval | Less frequent, usually annually | More frequent, usually monthly or quarterly |
| Purpose | A plan for where a business wants to go | An indication of where it is actually going |
| Used for |
|
|
| Importance in decision making | Less | More |
5 tips for cash flow management
Send invoices quickly and get paid faster
Customers rarely pay until they are invoiced. Invoice customers as soon as a job is done or the product is shipped. You can offer early payment discounts to those who pay their bill in a short amount of time, such as a week or 10 business days.
Focus on cash flow, rather than profits
If your cashflow is in order, your profit will be in order. Once you have a rigorous cash management in place, and your business is generating steady revenue, you have got your business to the next level.
In the beginning stages of your business, focus more on managing cash flow rather than profits. Young businesses are encouraged to work with reliable, quick-paying clients initially, even if it means smaller clients and slimmer profits margins.
Use digital technology to your advantage
Keeping track of cash flow can be difficult. By using cloud accounting software, such as Xero, you can get a real-time picture of your current cash flow situation, means it’s easier to manage your cash flow and expenses. Accurate, reliable financial forecasting takes the guesswork out of your cash flow and gives you time to take action.
Control spending and extend payment terms
Have you shopped around for the cheapest suppliers? Can you spread the cost of big purchases – like machinery and vehicles – by leasing instead of paying in one go?
Focus on the essentials. Control costs and keep hold of your cash. A large payment upfront can tie up your working capital and make it difficult to address any unplanned or unpredictable expenses.
Are your supplier and customer payment terms mismatched? For example, paying suppliers in 14 days, but getting paid by customers in 30.
Negotiate with your suppliers to extend your payment terms as long as possible to align with your known cash ins and outs. So you can unlock a significant source of cash, freeing up more of your working capital.
Maintain cash reserves
A cash reserve acts as a buffer and can help you better weather the ups and downs of running your business. It is nearly inevitable that at some point, you may experience a cash shortfall. By placing extra cash in the bank at those “peak” seasons, you will save a lot of stress in the “slower” seasons.
As a best practice, try to have enough cash reserves to last you for 3 to 6 months of expenses. This enables you to overcome short-term fluctuations in cash, resulting from slow paying customers, business disruptions, seasonal downturns or threats from new competitors etc. Spare cash buys you more time if things go wrong, and it also allows you to experiment and test new ideas without needing immediate income to cover your costs.
