Cash is king as the old saying goes. And boy is that a truth you live and die by as a small business owner. While there are some things that owners can do like creating buffers, frequenting online banking and utilising your credit card for extra terms. These are good behaviours and they will definitely help but when it comes down to the crunch there are three main areas that are what drive your cash flow situation.
- Creditor terms – negotiating and extending terms in the outset is imperative.
- Billing / Invoicing – clarity on your expectations of what, when, how and where to pay is always a great start. Invoices need to be raised on a timely basis.
- Stock / Resources – slow moving stock, bulk buying stock on promotion and purchasing assets that don’t get utilised enough to warrant a purchase or hiring full time staff when there is only a half days work to be done.
The above are what the banks and accountants use to measure your cash turnover. This is indicative on the relevance and its importance to its weight in driving your bank balance. CubedBiz bookkeeping will no matter how big or small your business. keep a close eye on your payables, receivables and stock turns.