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CASH FLOW management
Cash is the lifeblood of your business. Profit precedes cash. Without effective cash flow management your business will show signs of stress or struggle. Suppliers start to delay or withhold services, increased time is spent pacifying suppliers. Further still, your focus is taken from the business and is placed on survival.
We offer the following solutions to cash flow management or shortfalls:
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Cash flow management, review and business recommendations
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Cash flow forecasting to enable you to build a cash buffer
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Navigate you and your business through cash flow shortfall period
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Business efficiency recommendations
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Build the necessary paperwork to gain a cash flow loan
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Build in financial processes to ensure your business grow
Cash Flow Management
Cash Flow Management
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Poor cash flow management affect many small businesses. 8 out of 10 businesses fail owing to poor cash flow management.
6 steps to to ensure that your cash flow management is better prepared:
1. Keep your budgets, forecasts and accounts up to date.
This can be as simple as paying for a software to automate invoices and payment reminders. Also this should offer you a 'at a glance' view of your current position and current cash flow.
2. Manage your collections better.
Don't let too many invoices fall overdue, it may impact your cash flow more than your realise.
3. Manage your inventories.
Make sure that you are not sitting on too much prior to revenue / collections.
4. Don't mix your business and personal finances / assets.
Leveraging your successful business for personal cash flow to buy a car, boat - for example, might pose consequences down the track when you want grow via investment, loans or even sell your business.
5. Build a reserve tailored to the needs of your business.
This can be a cash reserve placed in a separate account, locked away for emergencies. If you are lucky enough not to be in business where reserves are required, it is still good practice to do this item such as tax.
6. Monitor and review frequently.
If all else fails, get a second opinion to review your accounts and your cash flow forecasts.
Preparing for a Business Loan? Read our 8 steps before you apply.
Obtaining a business loan or funding is a little like running a marathon – you need to be prepared!
Recession Proof your Business. Part 2 – Cash and Strategic Funding.
8 out of 10 businesses fail due to poor cash flows. As a downturn starts to bite, customers are slower in paying, cash reserves dissipate, you start to delay payments to suppliers in order to prioritise salaries.
How CFO Evolve helped an Australian Retailer to gain a cash flow loan for business growth
A seasonal low-point at the end of the year, substantially increased inventories, tax liabilities due and payable and the need to pay increased salaries created a perfect storm of cash required.