Cash is King | NZ FIJI TIMES

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UPDATED: 11:26am – Cashflow is the lifeblood of every business- especially small to medium Businesses.

What is Cashflow ?

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Cashflow is the movement of cash in and out of a business usually over a specific period of time.  Think of it as ‘Fuel’ in your car.  It keeps your business running.  It allows a business to purchase stock, pay their staff, pay all expenses and improve the business.

Why is Cashflow important?

Knowing what is coming in and going out of your Business helps you plan and avoid any problems. Lack of cash is one of the biggest reason why small businesses fail.

How to manage Cashflow

The best way to keep track of your cashflow is to prepare a cashflow statement monthly, quarterly and yearly.  Cashflow statements very quickly tell the story of how much revenue is coming in and how much is going out. This information can help predict where a business will stand financially in the near future.

Photo / Google and Fameeza image supplied

Ways to improve your Cashflow

  1. Same day invoicing – Don’t wait until end of month to send out your invoices
  2. Ask for deposit upfront with the balance on completion of job
  3. Consider mobile payment systems which allows businesses to collect payments on the go from a smartphone so you can improve cash flow, reduce funding costs and reduce bad debts. Ask your bank about it.
  4. Speak to your bank about a working capital facility to cover emergencies.
  5. Create a cashflow forecast to predict your cashflows on monthly basis. This information will help spread out big purchases and investments – such as staff hires, marketing campaigns so your cash flow is not affected.   Article By Fameeza Sheikh. Business Acquisition Manager .Bank of New Zealand.
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