Here some of the topics about cash flow management. These articles provide understanding easily cash flow management.
1. Know when to sync your profits to your losses
The” break even ” point is where a company’s profits are compensated for. It’s kind of like the point where the company goes straight. Knowing when to come to this point allows you to make more clear predictions, even if it does not directly affect your cash flow. You can clearly see where your cash will go and how much you can make short or long-term plans accordingly.
If you focus on what you need to do to achieve break-even, you will be wise to spend your capital and make more sense of your budget planning.
“Follow your vision, not money, ” said Tony Hsieh, founder of Zappos. The money will surely follow you.”
2. Check your cash flow status continuously
Avoid giving the majority of your focus on the company’s profits. This may seem to contradict what I mentioned earlier in the article, but it does not contradict. In order to compare, you need to look at your wife and break even on a regular basis. But you still have to focus on your cash flow and spending. As a result, your profitability will naturally increase.
Derek Flanzraich: “not every month is enough, I almost every week I check both personal and financial status of my company.”
3. Always try to keep a cash flow reserve
Each business must be aware that it may face a budget deficit in some periods. This could happen to any company, even companies with the best planning. But survival depends on how you can overcome these budget deficits. Having a cash reserve for such difficult times will reduce your stress and distractions and allow you to focus on expanding your business.
4. Better manage your resources
It’s not your job to manage your business budget. Therefore, you should hire an accountant or CFO to transfer your responsibilities in financial matters to them. If you do not have a material situation to meet this, you can assign a trusted employee to these jobs. When you take over the burden of financial affairs, you will have a greater playground to make plans that will make your business bigger.
5. Try to get your receivables now
Lower your billing term as much as possible. Take care not to work for longer than 15 days. Even if possible, ask someone for help to track down receivables and your customers that need to be collected.
6. Organize early payment campaigns
If you are stuck in cash flow and waiting for payment day will force you to tell your customers that you can make a discount if they pay early.
If your employees are having difficulty in collecting, give them the right to take initiative and discount if necessary. After a while, avoid abuse with a strict set of rules.
7. Avoid unnecessary spending
Making financial projections for future periods will help you realize your regular and necessary expenses. You may want to reduce all your expenses and get rid of some unnecessary expense items, except for the required expenses. Visit the Office to find out which expense items you can reduce in your company. The office is the easiest way to reach and reduce costs to suppliers that meet your needs, and you can easily lower your company costs by making advantageous procurement agreements.
8. Just be smart about hiring
There’s some advice we’ve heard about this for years. Like, “don’t hire without a real need.” This advice is true at some point, but the more accurate thing is that it is always good to do a clever job. If you can hire a very talented person, you can transfer the work done by 2 or 3 mid-level employees to the newcomer. You will probably have to offer more salaries and opportunities, but it is likely that this salary will be less than the amount you spend for 2-3 employees.
Another issue that you should bear in mind about hiring is that the employees you hire can quit at a time. And that brings you back to where you started. According to a University of California, Berkeley study, hiring an employee costs the company an average of $4,000. This amount is quite enough reason to pay attention to hiring.
Salesforce CEO Marc Benioff: “the secret to successful hiring is very simple; just look at the people who want to change the world.” Benioff’s word seems very cliché, but he’s quite right.
9. Make the most of technology
Make a backup of all your files, cash flow tables, and store them regularly. For security reasons, use storage systems such as Google Drive, iCloud, Dropbox. These types of systems are not only secure but also preferred by being accessible from anywhere with internet access.