Tips for improving cash flow

Many areas of your business can have an effect on how much cash you have available. By controlling your expenses and increasing your profits, you can improve your cash flow.

Monitor stock levels

Holding too much stock will tie up cash and increase storage and insurance costs. Practising good stock control will keep stock at efficient levels.

Manage accounts

Follow up on overdue accounts. Managing debtors and having good credit policies will keep your cash coming in.

You may also be able to negotiate longer payment terms with your suppliers. If you can get payment from your customers before you pay your suppliers, you will have zero out of pocket.

Review banking products

Using the right banking transaction products can have the money in your pocket sooner. Consider a mobile eftpos device, or investigate services to take payments over the phone or online.

Increase income

Review your pricing, use an advertising campaign or improve your customer service to see if you can increase profits. You may also want to consider growing your business.

Reduce overheads

Think about reducing staff overtime and controlling overheads. Make your business more environmentally friendly and you may reduce costs such as power and water bills and minimise wastage. Remember to clearly communicate your policies on these items to your staff.

Improve your financial skills or get expert advice

Improving your management and financial skills can help you improve your cash flow. Attend a workshop to improve your business knowledge.

You can also seek advice from a professional accountant or financial adviser, who can assess your individual situation.

Find an accountant at CPA Australia, Institute of Public Accountants or Chartered Accountants Australia.