The sudden onset of the coronavirus brought with it uncertain times for almost every small business in Australia. Almost overnight, business owners shifted their thought process from operations or expansion towards pure survival. In days like this, cash flow is critical, and it's more important than ever to keep on top of it. What could you do in this type of scenario to strengthen your cash flow position?
Being Pragmatic
By all means, try to cut your costs as much as possible, as every saving will go to the bottom line. However, you should pay close attention to your internal practices and make sure that you are fully aware of your financial situation from day-to-day.
Invoicing
How much attention do you pay to your debtor book on an ongoing basis? Do you know how many days it takes for you to collect those outstanding invoices or if certain clients tend to "slip" a bit? Of course, you may be busy and focusing on other logistical and operational tasks, so if you don't have the available time, then you should definitely bring in a bookkeeper to do this. They will cover this with precision and make sure that they follow-up with each customer right away should any bill become overdue. Sometimes, all it takes is a gentle reminder, but the bookkeeper will also advise you if a particular customer is often late. They'll also make sure that those invoices go out immediately and without any delay.
Cash Flow Forecasting
If you have been a little lax with your accounting in the past and do not have a formal cash flow forecast, then now is the time to put this in place as well. This will help you to project your income versus expenditure and will highlight any potential problem well in advance. You can then take steps to adjust the cash flow in advance so that you try and avoid any particular crunches.
If you're not familiar with this method, then you should consider outsourcing the task to a bookkeeper, who will be able to suggest other ways to deal with the cash challenge as well.
Taking Shrewd Action
Remember, now is the time to be shrewd and to take steps that will stand you in good stead during the recovery. A professional bookkeeper is an investment, and you can benefit from their expertise as soon as they become part of your team.
Share27 March 2020
If you have neglected your accounts recently, you may be worried about having to sit down and crunch the numbers. This is where an accountant can help you. This site is dedicated to the subject of accountancy and the different ways in which an accountant can help you to stay on top of things. I'm not a trained accountant, but I have studied this subject for many years and I wanted to share my passion for it with the rest of the globe. So, I would like to invite you to explore this blog so you can find out more!
