5 tips for controlling your cashflow

Is your cashflow position keeping you awake at night? Don’t worry, we have five simple tips to improve your cashflow management and achieve a positive cash position.

1. Give your accounts receivable a boost

Invoice your client as soon as the job is completed, or consider invoicing in instalments once key milestones are reached. Also, make sure you have strict payment terms in place.

2. Negotiate longer payment terms

Talk to your suppliers to negotiate 30 or 60-day payment terms. This delays payment for your most common overheads, helping you spread the cost over a longer period.

3. Always have a cash reserve in place

Putting surplus profits into a cash reserve gives you a buffer to draw on when cashflow is challenging. This can be a great way to get through quiet periods or cover unexpected costs.

4. Make the most of your cashflow forecasting tools

Use the cashflow tools in your accounting software or forecasting app to create a rolling cashflow forecast. This helps you spot the potential cash shortfalls and budget accordingly.

5. Keep a close eye on inventory levels

Review your inventory levels and warehouse stock to make sure capital is not tied up in slow-moving stock. Think about a leaner approach that reduces your costs.