Do you want a healthy cash flow? Managing your cashflow is incredibly important when running a business and yet I see the same errors being repeated by entrepreneurs over and over again!

Small and medium sized businesses are highly dependent on ensuring a healthy cash flow and the consequences of late payment or bad debts can have huge impact.

Also be aware of over trading. This is where a businesses turnover is rapidly expanding and the required working capital increases.

Be aware of your time line i.e. the difference in time between completing an order/service, raising the sales invoice and your customer paying compared with the associated expenditure time line.

So are are some tips to ease the pain:

1. My clients that use my recommended online accounting software Xero have found their cash flow improve. Why? Well, the software makes it very easy to email statements to customers which prompts earlier payment.
2. Also by moving from emailing statements from once a month to every two weeks they have found a marked improvement in their cash flow
3. For new customers for your business it is sometimes recommended to receive a deposit before you start to deliver them services/products
4. If it is possible, consider setting up monthly standing orders with your customers so you are receiving monthly contributions before the work is undertaken
5. It is important to consider performing credit checks on all new customers before offering them credit terms
6. Make suer your customers understand your payment terms and that they are clear and consistent
7. Make sure you raise your sales invoices quickly and accurately
8. Make it easy for your customers to pay. For example, on all your invoices provide details of your bank account so that they can make an online payment

If you would like to discuss your cash flow and my recommended  Xero online accounting software then please do not hesitate to contact our tax experts by sending an email to kevin@kwaccounting.com