We cannot stress further the importance of properly managing your cash flow to ensure the smooth running of your business. However, in times of crisis such as the ongoing COVID-19 pandemic, this becomes more than important– managing your cash becomes a necessity for survival.
If you are experiencing cash flow troubles, here are five things you can do to manage your cash flow better.
1. Check your expenses.
Now is the perfect time to review where your money is going and check which expenses can be minimised or eliminated completely. Re-evaluate your expenses and decide which ones are essential and should stay, and which ones can be trimmed down or cut altogether.
2. Negotiate your debt.
Initiate a discussion with your lenders if interest only or deferred payments on outstanding debts is possible.
3. Reduce your rent.
There are some government-backed rent assistance schemes which subsidise a portion of your rent and/or require landlords to waive part of it. Aside from this, you can further reduce your rent by checking if it makes business sense to move to a smaller space, close down other offices or stores that are not performing well, or move to a more affordable commercial space within your budget.
4. Request for more flexible payment options.
It never hurts to ask, especially if you’ve been transacting with your vendors for a long time and you’ve established a certain level of mutual trust and confidence. You can request for more flexible payment options or longer payment terms.
5. Tap into available credit lines.
Take advantage of available lines of credit and place the funds in interest-bearing accounts.
Assessing your cash flow is fundamental to gaining a better understanding of your business’ financial health. As cash flow experts, we can do your monthly, weekly, or even daily cash flow statements. This gives you visibility on where your cash comes in and goes out to, as well as allows you to plan ahead.
If you need any support with reviewing your business systems and performance monitoring tools, call my office on 3399 8844 and we will give you a FREE Business Systems Check. You can also visit our website at www.straighttalkat.com.au and complete your details on our Home page to request a free appointment.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.