How to maintain a positive cash flow
Track your expenses
Spending without keeping track of where your money is going could have its downside on your business. keeping records of your expenses day in day out can help you identify where you are overspending.
Investing in an accounting software helps you monitor your expenses — you get real-time data of how much you are spending on each of your expenses. With this data, you are able to make certain business decisions. like what you need to cut back on, find a cheaper alternative.
Get paid faster
Having your invoices unpaid is one of way to kill your business. Do not hesitate to send an invoice immediately after the completion of a project. Therefore, it is important to take steps toward getting paid faster. Asking for an advance payment is one of the fastest ways of getting your invoice paid. This ensures you have a steady flow of income.
Utilize the right technology
Employing the right tool, a good accounting software designed to help your business grow is the key to staying on top of your cash flow. With this tool, you are able to manage and control your cash flow, this is done by sending out invoices at the appropriate time, setting due dates and reminders, recording your day to day expenses, and getting a real-time report (profit and loss, balance sheet).
You never know where your next project might take you, it could be a remote area, 12 hours away from civilization (no network reception, no power supply). With the Accounteer mobile app, you don’t have to wait to get back to the city to send an invoice to the client, all you have to do is create an invoice which will automatically be sent to your client as soon as you are connected to the internet.
Prevent overspending
It can be tempting to buy the best of everything for your business. Relax! If you give in to this temptation, you might eventually be spending on unnecessary things that could land your business into bankruptcy.
To prevent overspending, create a strict yet realistic budget and try as much as possible to abide by it. This boils to the fact that you need accounting software to tell you how much you are making and how much you are spending. This ensures what is going out is not more than what is coming in.
Lean inventory
It is a bad idea to overstock your inventory, as you have to wait for months to sell your backlog, which leads to negative cash flow for your business. Have the inventory you need at a specific time. Stocking the right amount of items in your inventory improves your cash flow situation, this way, you have the ability to have some cash reserved when you need it the most.
