Effective cash management is important for any business. Poor cash management can lead host of issues within your business, for example, inability to pay your bills.
In view of this, we have listed 5 different ways you can improve your cash management, regardless of the size of your business. It is also important that none of these strategies are especially expensive to execute, merely requiring you to re-think a couple of elements of your business:
Adopt an Epos System
Having an effective epos system can automatically track all incoming payments and changes to stock as it
processes a payment for your service or product.
Profits can also be maximized
with epos software with quick and accurate reports on a daily, weekly or
monthly basis. These reports can interface directly into cloud reporting
software, which allows for a wider range of detailed reports to help keep you
on top of your business.
All transactions are
recorded so at the closing time of the day, you can guarantee that any and
everything has been accounted accurately.
Know
Your Breakeven Point
You can't keep on making
profits unless you know your breakeven point. An important reason to calculate this
number is so you can understand complete ongoing expenses and if the point is
too high, you can assess what you need cut. Calculate this number along with
taxes, costs and income with the goal that you can be proactive when addressing
your costs if they start to rise.
Have
Money in Reserve
Keeping up some money in
reserve is important for a business. If for instance, you have a terrible month
and you are hit with a surprising cost, you can use that money to take care of
the bills without going into the debt. It is a smart idea to place your profits
into cash reserves first before you grow the business, if there is some
emergency hitting you unexpectedly.
Use
Incentives to Increase Sales
Everybody loves a good
deal, so tempting your customers with incentives is potentially a decent way of
increasing your sales while not costing a lot to implement.
For example, coupon
codes are a good idea. You can email a customer a coupon to entice them to return
to you as a recurrent customer. The coupon doesn't cost you anything to send
and may bring back repeat business in the future for a fraction of the price of
gaining another one. You could also analyse into sponsoring a competition and give
away a product or service; the products don't need to cost a lot, while it
could bring about a good amount of coverage.
Collect
Receivables As Soon As Possible
Many businesses end up
under financial pressure due to delivering goods and services without accepting
payment. This may bring about you paying interest on loans taken out to cover
your short comings, as there is no pressure on your customers to pay right
away. You should keep purchases like these, and give your customers incentives
to pay for goods and products straight away.
