In the business world, you hear a lot of phrases tossed around. ‘Work smarter, not harder.’ ‘The customer is always right.’ But there’s one saying that every business owner, should have etched into their mind: ‘Cash flow is king.’
Cash flow isn’t about how much money you’re making on paper, it’s about the real, hard cash that’s moving in and out of your business at any given moment. A healthy cash flow means you can pay your bills, invest in growth, and sleep soundly at night. A poor one, even if you’re profitable, can see your doors shut in a flash. At Plus 1 Group your trusted accountants in Shepparton, we’ve worked with countless businesses just like yours. We’ve seen the triumphs and the struggles, and time and again, the key to success comes down to a proactive approach to managing money. Here are some simple, actionable strategies to keep your business’s cash flow in the best
1. Always Know Your Numbers
You can’t manage what you don’t measure. Don’t wait until the end of the financial year to look at your books. Get into the habit of reviewing your cash flow statement weekly or, at the very least, monthly. Understand where your money is coming from and where it’s going. Are there any unexpected expenses? Are payments from clients coming in on time? This regular check-in gives you a clear picture of your financial health and allows you to spot potential issues before they become crises.
2. Invoice and Follow Up Promptly
This is one of the most common and easily fixable cash flow mistakes. As soon as you complete a job, send that invoice! The faster you send it, the faster you get paid. But don’t stop there. Be polite but firm with your payment terms, and don’t hesitate to follow up if a payment is overdue. A simple, friendly phone call or email can make all the difference. Remember, late payments are a direct hit to your cash flow, so being proactive here is essential.
3. Optimise Your Outgoings
Just as you watch the money coming in, you need to scrutinise the money going out. Are there subscriptions you no longer use? Can you negotiate better deals with your suppliers? Look for opportunities to reduce non-essential spending. When it comes to large expenses, consider whether it’s more beneficial to buy outright or lease. A lease can spread the cost over time, helping to keep your cash reserves intact.
4. Build a Cash Buffer
Think of a cash buffer as your business’s emergency fund. Aim to have enough cash on hand to cover at least a few months of your operating expenses. This buffer can be a lifesaver during quiet periods, unexpected market changes, or when a major client’s payment is delayed. Having this safety net means you won’t have to resort to high-interest loans to cover day-to-day costs.
5. Consider a Line of Credit
While a cash buffer is your first line of defence, a business line of credit can be a strategic tool. It’s not a loan you have to use, but rather a financial safety net that you can tap into when you need it. This can be invaluable for bridging short-term cash flow gaps, like when you need to pay suppliers before a client’s payment comes through. Discussing this option with a trusted accountant, like the team at Plus 1 Group, can help you decide if it’s the right fit for your business.
6. Get Expert Advice
Managing cash flow can be complex, and doing it all on your own can be overwhelming. This is where a dedicated accountant becomes your most valuable asset. At Plus 1 Group, we look beyond the numbers. We work as a strategic partner, helping you set up systems, understand your financial health, and implement strategies to ensure your business remains financially resilient. We’ll help you anticipate challenges and seize opportunities, so you can focus on what you do best.
Ready to take control of your cash flow? Get in touch with our team at Plus 1 Group in Shepparton today.
Email or call our friendly team on (03) 5833 3000 and we’d be happy to answer your questions and book an appointment.
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