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How to Keep Your Cash Flow Positive

How to Keep Your Cash Flow Positive

Your first objective with your company should be to maintain a positive cash flow so that you can operate your company properly and honour your financial obligations in a timely fashion. Never place the other goals of your company ahead of the funds that are the lifeblood of your organisation; this is one of the […]

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Your first objective with your company should be to maintain a positive cash flow so that you can operate your company properly and honour your financial obligations in a timely fashion. Never place the other goals of your company ahead of the funds that are the lifeblood of your organisation; this is one of the common mistakes that new businesses make. It’s a good idea to keep from ten to twenty percent of all of your monthly revenues in your account in case you experience a sluggish economic downturn or other events impact the cash flowing into your business. Let’s take a look at some excellent ways to keep a positive cash flow and peace of mind about your business operations.

  • Know what you spend each month so that you can plan ahead for what you need and also any unexpected events that may arise. You need to know what you are paying for your product, what you should sell it for, and the profits that you expect to make on each item. You should also know what it costs each month to meet payroll, pay your energy bill, and to honour the financial obligations that you have to your own vendors.

  • Add value to your goods and services by offering bundles of your inventory if possible. If you offer discounts if clients purchase more than one item or add a tangible value with an offering that you add to the product then the client will be more inclined to spend more money on your website or in your brick and mortar store.

  • Make sure that you are sending invoices in a timely fashion after work has started for a client or as soon as a product has been delivered. You should also state clearly on the invoice when payment is expected, the details of incentives for early payment, and what will happen if the payment is late or not received at all. It’s important to stay in touch with clients who are slow to pay so that you can keep the money flowing into your accounts before you need to make withdrawals and payments yourself.

  • Have a back-up plan in case of an economic downturn, a crisis at your company, or the failure of a large client to pay his invoice. Check the website www.ashleyfinance.co.uk so that you can work with a team of professionals who can ease the stress of slow-paying customers with loans and advances that keep your cash flow positive and your business operations running smoothly and seamlessly. Once you discover the root cause of your cash flow problem, work with the team to improve the strategies that you are currently using to more effective models.

Keeping a positive cash flow is imperative in the business world and can keep you from worrying about how to meet the financial obligations that you have. Take the time to review your numbers, be familiar with your accounts receivable and accounts payable, and develop a fine balance between the two.

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