When your business cashflow dries up, problems start to multiply. Here’s five simple tips to keep that cash flowing.

1) Have a system in place to manage your debtors

– Come up with a clear, step-by-step way to handle outstanding accounts.

This might include:

* send a reminder email for unpaid invoices

* a phone call or email when the amount has been outstanding for a certain period of time

* a late payment letter explaining what your next steps will be (ie. pass to debt management agency, add interest)

2) Be prepared for tax time

– One of the fastest ways to run out of cash is to find yourself short at tax time.

Come up with a system to help you put enough aside each month so you’re never caught short.

* Sole-trader 20% of income

* Ltd company 25% of income

3) Try not to dip into business funds for personal spending

– It’s always tempting to dip into your business account for personal spending.

Have separate bank accounts for your business and personal money. Plus if you’ve over saved at the end of the tax year, you can give yourself a nice bonus – that’s much better than being caught short.

4) Sell old stock

– Too much stock?

Consider old stock, old furniture, machinery or even stationery: they can all be sold to free up space and provide a small cash injection.

5) Forecast your cashflow

– Create a cashflow forecast that will help you monitor and measure the flow of cash in and out of the business.

Need help with forecasting, tax saving or cashflow management? We’re here for you – just drop us a note or give us a call.