Poor cash flow management is one of the biggest reasons businesses in Singapore fail. It’s a common misconception that a business only needs to be profitable to survive.
Money coming in is great, but there’s more to it than that. As most business owners will tell you, a lot of money goes out too. Utilities, rent, salaries, suppliers, lawyers, taxes — the list goes on. It takes a lot to keep a growing business moving in the right direction.
To stay afloat, knowing how to increase cash flow in business is key. Financial forecasting could be the lifeblood of your business, especially if you want happy employees, a content landlord and an audit-free year. Cash flow is an umbrella term that covers a lot of different parts of your business. Ultimately it’s about balancing income with expenditures.
So, what can you do to boost cash flow in your business? Here are three simple ways to improve your cash flow position.
Track and chase up unpaid invoices
For a small business, unpaid invoices can make a significant negative impact on cash flow. But when invoices go unpaid, human error is almost always to blame. Sometimes business owners forget to even send invoices (this happens all the time). Often, customers forget to pay them. There is enough room for error that invoicing requires a system to keep track of things. Maybe you have an Excel spreadsheet where you keep tabs on accounts receivable, or maybe you’ve turned to some business invoicing software.
However you track invoices, it’s important to be able to see what you’re owed and have a system for chasing late payments. QuickBooks makes it easy to manage invoices from to end-to-end. You can create, send, track and send reminders to customers, all in one place.
Make payments as easy as possible
There are plenty of reasons why invoices go unpaid—and a lack of payment options is one of them.
It’s a good idea to be flexible about taking payments. Accepting checks and PayPal is a good place to start, but accepting credit and debit cards as well as ACH transfers is by far the best option. Including a simple “Pay Now” button along with your invoices ensures that customers have all the options they need.
QuickBooks customers that include a “Pay Now” button with their invoices get paid twice as fast.
Customise and automate accounting reports
There are a handful of accounting reports that business owners should be familiar with. Profit and loss statements along with a balance sheet are two examples of reports that need to be checked and understood frequently. These snapshots provide clarity about the big picture of your business. Knowing your accounts receivable is one thing, understanding how it fits into the rest of your assets and liabilities is another.
Perhaps the greatest advantage of accounting software over Excel spreadsheets is the ability to customise and automate these reports. If you’ve ever tried to create a balance sheet on your own, you know it requires a huge investment of time. It’s a perfect example of something software can do for you, freeing up your time for all the other tasks on your plate.
QuickBooks gives you all the tools and reports you need to manage your cash flow effectively. Get a first-hand look at how it can help you manage your books with ease. Try it free for 30 days.