5 Ways to Manage a Healthy Cash Flow
It has never been a more significant time to stay on top of your cash flow. We cannot express further the importance of properly managing cash flow in your business to ensure it runs smooth and for the the longer haul. However, in times of crisis like the ongoing COVID-19 pandemic, this becomes more of a necessity for survival.
If you are experiencing cash flow troubles, here are five things you can do to manage your cash flow better.
- Review your expenses.
Now is the perfect time to review where your money is going and check which expenses can be minimised or eliminated completely. Re-evaluate your expenses and decide which ones are essential and should stay, and which ones can be trimmed down or cut altogether.
- Negotiate with your lenders about your debt.
Initiate a discussion with your lender if interest only or deferred payments on outstanding debts is a possibility.
- Seek to reduce your rent.
There are some government-backed rent assistance schemes which subsidise a portion of your rent and/or require landlords to waive part of it. Aside from this, you can further reduce your rent by checking if it makes business sense to move to a smaller space, close down other offices or stores that are not performing well, or move to a more affordable commercial space within your budget.
- Negotiate more flexible payment options.
It never hurts to ask, especially if you’ve been transacting with your vendors for a long time and you’ve established a certain level of mutual trust and confidence. You can request for more flexible payment options or longer payment terms.
- Take advantage of lines of credit.
Tap into any available lines of credit and place the funds in interest-bearing accounts.
Assessing your cash flow is fundamental to gaining a better understanding of your business’ financial health. As cash flow experts, we can do your monthly, weekly, or even daily cash flow statements. This gives you visibility on where your cash comes in and goes out to, as well as allows you to plan ahead.
The 2 Peas Team
P: 1300 896 732