Starting the New Year Right: 4 Key Cash Flow Management Tips to Remember
Christmas has come and gone and we’ve welcomed a whole new year. Now, it’s time for companies to shake off the holiday hangover and get back to their regular business programming. The question is: where do you start?
The holiday season often leaves a lot of unfinished work, uncollected payments, and excess inventory. Also, the first few weeks of January are typically a stressful time for business owners as this is when cash flow problems pop up. Work often slows down and not enough money comes in because consumers relax from spending. Yet, the bills are piling up and taxes and other such requirements need to be completed.
Fortunately, the following tips can help you avoid these issues and make sure your business starts the New Year in the black:
- Make a financial to-do list
First things first, you need to know exactly what you need to get done for the next couple of weeks. Which bills need to be paid first? When should you follow up on unpaid invoices? When do you need to file for taxes?
Listing all your tasks will help you get organized and allow you to decide which things need to be prioritized. Also, this will help lessen the stress as you finally have a clear picture of what you have to do and you know you’re in control.
- Send out your invoices
Speaking of important tasks, perhaps one of the first things you must do after the holiday break is to send out any leftover invoices from the holiday season. This way, you can get the payments you need to keep things going for the next few months.
If you were able to send out all your invoices before the Christmas break, you’ll need to follow up on them now. Don’t wait for your overdue invoices to pile up. Remember, creditors who make the first noise, make the loudest noise.
This is where Slater Byrne Recoveries comes in. We can take care of following up on any outstanding balances and collecting the payments, so you get the cash you need as soon as possible.
- Do a cash flow forecast
Doing a simple cash flow forecast can help get you through even toughest times. And there’s none more important a time to do this than at the beginning of the year. Conduct a forecast for the first quarter using data of your expenses and sales from the previous years. This way, you can get a clearer picture of how much cash your business will need to operate comfortably in the next couple of months.
Use this forecast to come up with a more efficient budget, more effective invoicing terms, and other such strategies to get the money your business requires.
You can do the forecast with the help of your accountant as well as the use of an accounting software. Also, make sure that all your financial data are accurate and up to date.
- Review your credit terms
Late payments are among the major causes of cash flow problems for a lot of businesses, especially small and medium enterprises. Avoid this issue by reviewing and adjusting your credit terms. Consider negotiating more efficient payment terms with your current slow-paying customers. It’s also best to implement more stringent terms for your new clients.
For more tips and suggestions on how to properly manage your cash flow for the New Year, get in touch with us here at Slater Byrne Recoveries. We have a team of highly skilled and experienced specialists who are always ready to assist you.