Money Tips: Controlling your Cash.
Every company is being hit and bearing the brunt of interest rates at 10-year highs. Small Businesses are paying up to 3 % higher than a year ago.
As SME’s you have very little negotiating clout with financial institutions, unless you have more secured property or longer term in business behind you. By reviewing and controlling your cash and assets that you do have, you can make better decisions on future actions and strategies.
- If you have not already set a budget and cash flow projection then do so NOW.
- If you have – review your cash flow projections and identify potential problems and low times.
- Demonstrate your business is disciplined and organised. Have financial policies and procedures and follow them.
- Review all suppliers and their payment terms.
- Use the three supply rule don’t leave yourself reliant on only one supplier.
- Closely manage your invoicing process and collections practices.
- Review you customers financial status.
- Minimise bad debts through established credit assessment procedures, and established accounts receivable policy.
- Consider using other pricing policies before factoring or at least compare different strategies.
- Approach you bank early when you need credit you then have time to compare terms with other lenders and give yourself leverage for a better deal.
- Diversify your financial supply. Don’t just use one bank or financial institution.
- Record measure and review on a regular bases.
D & B Australasia Chief Executive Christine Christian says “Many small Businesses don’t manage outstanding debtors very well. They end up basically bankrolling their debtors”
These hints and tips all go to making better decisions and outcomes for your business.
