CASH FLOW IS KING
In today’s business environment cash flow should be monitored weekly if not daily. Do you have systems and processes in place to receive this information daily? Additionally, issues associated with cash flow can start with having outdated terms of trade. So when did you last review these?
In this communication, we will again address the subject of “What is keeping you awake at night”, based on the research of B Star, a research house based in Australia. In this instance we will discuss CASH FLOW
Cash flow management is key to survival, and in order for a SME to succeed and grow, keeping track of costs, budgeting for expected cash requirements, and monitoring, analysing and adjusting cash flow are essential.
“We watch our cash flow daily“
Is the following statement you?
“We are worried about cash flow. There’s been a slowdown in receivables. We have ballooning debtors and some major contractors are now really slow to pay“
Cash flow management can be challenging for SMEs, particularly when they lack relevant, up to date information. Only 65% of SMEs are producing accurate, timely internal business reports. If not done well, the consequences can be dire. The top nominated cause of financial failure for businesses is ‘Inadequate cash flow or high cash use’ (44%).
For some SME’s outsourcing collections allows them to remain focussed on their business, so if you are a small SME why not consider outsourcing this function? Yes there is a cost, but the results will be beneficial. The outsourced agency soley concentrate on contacting your suppliers and have follow-up procedures in place. The end result is more cash being introduced into your business often faster than you would have achieved as it is typically not your core skill, in fact many business owners phone their debtors when they experience cash flow shortages. Additionally, do not forget, the cost of outsourcing offsets the cost of having that function performed internally within your business, providing you with additional savings and more cash flow.
Why not invest 3-4 hours with your Trusted Advisor / Accountability Partner to implement an effective cash flow monitoring system, especially as the slowdown is fronting us all with Christmas just around the corner.
I suggest you call Murray TODAY on 09-309-322 or visit our website www.insightca.nz