Has cash flow become a major problem for your business?
One of the most fundamental goals of any business is to keep the cash flowing at all times. You might have a wildly popular product and great relationships with your customers, but all of that is moot unless you can also collect payments in a timely fashion.
You might have a wildly popular product and great relationships with your customers, but all of that is moot unless you collect payments.
This hinges on a few key requirements. To maintain smooth cash flow, you need a few things – a steady stream of sales, an understanding with your customers about making payments and the right technology in place to move money around smoothly. Without lining up all these elements, you risk letting your organisation slide into financial trouble.
Cash flow can become a major issue
It's difficult to make much headway in business development when you're too busy focusing on basic processes like collecting payments. Unfortunately, many Australian organisations are doing just that. According to new research from American Express, only 22 per cent of firms have adopted fully automated solutions for collecting money from clients. The rest are still collecting money manually, which tends to drag them down.
"We are approaching a financial event horizon for many Australian businesses. The research tells us they can't sustain this outdated approach to managing payments much longer," said Martin Seward, vice president for small and medium enterprises at American Express Australia.
How you can tighten things up
Every business needs to get its hands on quick cash sometimes – especially when tax season comes around and you have pressing needs to attend to, such as payroll tax. The first step toward improving cash flow is to develop better relationships with your customers. If everyone on both sides knows and trusts each other, it will be easier to keep the cash flowing.
It's also important to have a standardised process in place for sending out invoices and a set schedule for when you'll follow up and demand payments. If you have all of this set up, your cash flow should become more predictable, which will make it easier to plan your business' future.
Get reliable solutions for your business
If you ever encounter a situation where cash flow is jeopardising the health of your business, it's best to get help immediately. At Wilson Porter, we have a team of chartered accountants who will be ready to step in and assist you when called upon.
We have a great deal of experience preparing budgets, mapping out cash flow and providing a solid all-around suite of business solutions for everyone. Talk to us today about whatever your needs may be.