Year after year, survey after survey, researchers are finding the same thing: poor management of cash flow is one of the top reasons Australian small business fail. If you want your business to have a better chance in the market then you need to keep a very close eye on your cash flow. Here are three tips to get started.
1. Manage your receivables
One of the most important things small businesses can do is stay on top of the money clients owe you. According to a Dun & Bradstreet report, the average late payment time for an Australian business is 14.4 days, which makes their negligence your problem. Late payments mean you struggle to pay your own bills and rent, which can set off a chain reaction of bad debt and tanked partnerships.
2. Have an emergency fund
If your company starts to see some bad results, you will want a backup fund. Many business owners end up dipping into their personal funds (32 per cent) or resort to credit cards (33 per cent) to help manage cash flow, reported Business Insider Australia. But this is only a short term solution and could end disastrously for you personally. Creating an emergency fund from the start will help you field hardships instead.
It is too easy to burn out and make careless mistakes.
3. Get help
Small businesses want to be able to say that they've started from the bottom and worked their way up all by themselves, but that's rarely the case – they need help! Business owners need to focus on running the day-to-day, as it is too easy to burn out and make careless mistakes. That said, your finances need just as much attention, so you need to employ a professional to manage them and relay crucial information to you to keep your company in good standing.
That's where we come in. Accountants Australia has the knowledge, support and dedication to devote to your small business so you can continue to focus on what you do best. You make the money, and we will manage the cash flow – it's as easy as that. Contact us today and let us help you work smarter.