My Business' Cash Flow is on Life Support: What Do I Do?
Updated: Oct 17, 2022
Cash flow is the lifeblood of any business.
The more you have, the better off your company will be; but when it doesn't come in fast enough or at all for some reason (like slow-paying customers) these problems can quickly multiply and start draining away what little energy there was left before they even started bothering us! It's easy to overlook this issue if things go smoothly most days - until one day something goes wrong because we didn’t know just how bad our situation really *was*.
Here are a couple of ideas to follow to ensure your cash flow remains positive:
1. Ensure you get paid
Adding explicit wording to your invoices that demand payment upon receipt or within 30 days makes it clear, and tracking these invoiced items ensures they won’t fall through the cracks. Or better yet, don't extend credit, your not a bank! Get payment up front.
If we have a process already set up when customers don't pay us quickly enough - be aware! It might just need some assistance from you (or someone else) so wheels can begin turning towards collections services right away instead of waiting for after weeks of reminders. Anything beyond 90 days likely won't get paid.
2. Mind your expenses
There are a number of reasons why your might be bleeding cash. You could have an equipment breakdown, tech glitches or a natural disaster that cause unexpected expenses to pile up and leak money from the business without you realizing it! You also might have to many subscriptions, which add up.
Without proper accounting tools in place there is no way for managers/owners to identify these leaks before they spiral out control, so make sure this doesn't happen by investing now with our top notch solutions today.
The key insight here: When managing finances responsibly then all aspects will fall into place - even those pesky little things called "expenses."
1. Forecast ahead
Looking into your company's cash flow projections is a great way to be proactive and eliminate issues before they arise. Without this information, you're likely going find yourself in debt or with less funds than expected for future expenses which can quickly lead down an unstable path of sorts where there are more emergencies instead planned expenditures! Six-month forecasts give entrepreneurs peace knowing that if something does happen (i..e revenue falls short) at least he has plenty enough time ahead him t make up the difference through other means such as cutting back on unnecessary spending.
1. Hire a Professional
One of the most important business decisions you will make is hiring an experienced Financial Professional to help with your financials can be crucial in helping manage cash flow going forward while accomplishing goals within your company - For those more complicated operations or industry specific insights having someone on hand who has experience managing these types transactions, provides transparency into true Runway performance helps create clarity about the next steps needed.