{"id":2637,"date":"2020-05-05T14:35:28","date_gmt":"2020-05-05T14:35:28","guid":{"rendered":"https:\/\/financiallyfitlife.co.za\/blog\/?p=2637"},"modified":"2020-05-05T14:41:16","modified_gmt":"2020-05-05T14:41:16","slug":"tips-to-improve-business-cash-flow","status":"publish","type":"post","link":"https:\/\/financiallyfitlife.co.za\/blog\/tips-to-improve-business-cash-flow\/","title":{"rendered":"Tips to Improve Business Cash Flow"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.4.3&#8243;][et_pb_row _builder_version=&#8221;4.4.3&#8243;][et_pb_column _builder_version=&#8221;4.4.3&#8243; type=&#8221;4_4&#8243;][et_pb_text _builder_version=&#8221;4.4.3&#8243; hover_enabled=&#8221;0&#8243;]<\/p>\n<p><span style=\"color: #000000;\">Cash flow is critical to any business despite the size or type of business. Cash flow can be compared to a river. A river will always flow into a dam or the sea and for the river to remain flowing there needs to be a constant inflow of water. At some point there might be a cascade where the water will be tumbling down over rocks and building up to that cascade the river needs even more water flowing in. When there is a strong inflow of water the cascade turns into a beautiful picture. Similarly businesses need a constant inflow of cash to support their cash outflows in the form of expenses, paying suppliers and repaying debt. When a business has a solid inflow of cash and manage the outflow of cash, the business can ultimately grow and thrive. \u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"color: #000000;\">In a recent study conducted by SasFin and sme.africa, businesses indicated that cash flow (or rather a lack thereof) contributes to 61% of their biggest financial stress and concerns during the current pandemic. Implementing an effective cash flow management strategy is becoming more critical now than ever before. Here are a few tips to help businesses improve their cash flow:<\/span><\/p>\n<p><span style=\"color: #000000;\"><strong>Change your invoicing to improve cash flow<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Invoice more regularly and not only on a monthly or weekly basis.<\/span><\/li>\n<li><span style=\"color: #000000;\">Implement an automated invoicing process \/ system that sends out invoices as soon as possible.<\/span><\/li>\n<li><span style=\"color: #000000;\">Make it easy for clients \/ customers to pay by offering various payment options i.e. cash, credit card and electronic fund transfer.<\/span><\/li>\n<li><span style=\"color: #000000;\">Include a payment link \/ button on the invoice for immediate payment.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\"><strong>Use multiple accounts to manage cash flow<\/strong><\/span><\/p>\n<p><span style=\"color: #000000;\">Making use of multiple accounts can fundamentally assist to effectively monitor the cash flow throughout the process and immediately identify any shortages in cash or cash flow inefficiencies. Multiple accounts can refer to two types of accounts:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Control \/ suspense accounts which can be used as a book \/ accounting entry only to monitor the cash flow process. In this instance cash doesn\u2019t necessarily move between different bank accounts. This is only a cash monitoring function.<\/span><\/li>\n<li><span style=\"color: #000000;\">Use separate bank accounts to manage cash flow more effectively. For example transfer the VAT component of any funds received to a separate bank account to have money available when the VAT payment is due<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\"><strong>Recover debtors to improve cash flow<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Offer a discount if clients \/ customers pay earlier.<\/span><\/li>\n<li><span style=\"color: #000000;\">Set-up payment terms and communicate accordingly with clients and customers. Don\u2019t be afraid to charge interest and penalties for late payments, but ensure the terms were communicated beforehand.<\/span><\/li>\n<li><span style=\"color: #000000;\">Where a big client only pay at month-end, negotiate with the client to pay a few days earlier.<\/span><\/li>\n<\/ul>\n<p><span style=\"color: #000000;\"><strong>Extend payments to improve cash flow<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000000;\">Another crucial aspect of effective cash management is to extend \/ defer cash outflows without incurring penalties or interest. Any business will benefit from retaining cash within the business for a prolonged period.<\/span><\/li>\n<li><span style=\"color: #000000;\">For bigger payments, consider to make payments in two instalments to spread big outflows.<\/span><\/li>\n<\/ul>\n<p><strong><span style=\"color: #000000;\"><em>For more strategies to improve business cash flow, download the \u2018\u2019FREE Guide to Improve Business Cash Flow\u2019 \u2013 <span style=\"text-decoration: underline; color: #000080;\"><a href=\"https:\/\/mailchi.mp\/financiallyfitlife\/businesscashflowguide\" target=\"_blank\" rel=\"noopener noreferrer\" style=\"color: #000080; text-decoration: underline;\">click here<\/a><\/span><\/em><\/span><\/strong><\/p>\n<p><strong><span style=\"color: #000000;\"><em>For a special post-lockdown cash flow consulting package to support SMME\u2019s \u2013 <span style=\"color: #000080;\"><a href=\"https:\/\/mailchi.mp\/financiallyfitlife\/cashflowconsulting\" target=\"_blank\" rel=\"noopener noreferrer\" style=\"color: #000080;\"><span style=\"text-decoration: underline;\">click here\u00a0<\/span><\/a><\/span><\/em><\/span><\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cash flow is critical to any business despite the size or type of business. In a recent study conducted by SasFin and sme.africa, businesses indicated that cash flow (or rather a lack thereof) contributes to 61% of their biggest financial stress and concerns during the current pandemic. Implementing an effective cash flow management strategy is becoming more critical now than ever before. Here are a few tips to help businesses improve their cash flow. <\/p>\n","protected":false},"author":3,"featured_media":2638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":""},"categories":[178],"tags":[199,99],"_links":{"self":[{"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/posts\/2637"}],"collection":[{"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/comments?post=2637"}],"version-history":[{"count":4,"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/posts\/2637\/revisions"}],"predecessor-version":[{"id":2644,"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/posts\/2637\/revisions\/2644"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/media\/2638"}],"wp:attachment":[{"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/media?parent=2637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/categories?post=2637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financiallyfitlife.co.za\/blog\/wp-json\/wp\/v2\/tags?post=2637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}