Are you facing any difficulties managing cash flows? Follow these 6 steps to overcome it.

Cash flow is a pre-requisite for survival. Therefore, the requirement to efficiently and effectively manage cash remains important to any business. The challenges placed on businesses in the current pandemic are endless. Surviving in this hardship is a great way to reap the many benefits from the post COVID opportunities that will come. Based on our 100% track record of successfully guiding our clients to grow during both good time and tough times, SandS Australia continues to prove any business can thrive during challenging periods. How? Read on!

Managing cashflows is crucial– especially in the current situation. There are many reasons why businesses run into a cash flow crunch, such as not accessing the full range of support out there to keep businesses afloat, retain staff, and acquire new clients from competitors who have shut their doors permanently. Other very common problems to survival include slow debt collection, bad debt, seasonal sales fluctuations, overinvestment in capacity, or too much stock. To contribute positively to the economy and ensure your business thrives, it is essential you have the skilled finance and administration support to manage and resolve these challenges all businesses face daily. These support and contingency plans we’ve put in place for every one of our clients has meant they are growing strongly through this pandemic by picking up the clients from their less well managed and struggling competitors.

This is what we’ve done to keep our clients thriving through and post COVID. You too can implement these steps.

1. Forecast your cash inflows and outflows accurately: This may take a few hours and dollars initially. However, it is worth the call as you have the past performance information and forecast for future, to analyse, prioritise, and manage your valuable cash in hand.

2. Set up a strong a marketing funnel and sales capability to acquire the many clients of your distressed or bankrupt competitors.

3. Review your receivables and collect your debts. Request discounts from suppliers while negotiating to delay payments if possible: This should be performed carefully as, at this point in time, it is important to maintain good relationship with your customers/suppliers because the downturn impacts everyone adversely. We have managed to positively control the receivable/payable balances for our clients to reduce their hassle of collecting debts and making payments.

4. Apply for every one of the many Federal, State, and local government financial aid you are entitled to: This option can cause an immediate increase in the cash flow. However, the spending should me made wisely, with a view of investing each dollar only where there is a return. With our many years of experience in the investment industry we have a proven track record showing our clients where to spend money wisely, based on cost-benefit analysis, as well as diversifying the risk through diversified investments and business efforts. The strong financial skills and controls we help put in place enables us to rapidly review the financial position of our clients, to ensure that they receive the aid they are entitled to at the right time.

5. Dispose assets that are not in use and reconsider investing decisions on long-term assets: In such a precarious economy, it is vital to convert under or unutilised assets to cash so that it can be injected into profitable business activities and investments. Our SandS Resultants work closely with clients to help make the right business and investment decisions, which is a crucial building block that allows our clients to thrive through both good and tough times.

6. Create a sales promotion to sell old stock: Use discounts to get rid of the old inventory in possession. This will not only be a positive impact to your cash flow, but also reduce the risk of losses from stock obsolescence.

Written by Sasha, ACCA-UK, Certificate in Banking and Finance, MBA (General). She has many years’ experience in banking, finance and accounting, and lecturing for ACCA which helps her drive business growth.

Edited by Sam Mansoor. Chartered Management Accountant, CPA, Chartered Global Management Accountant, Dip. Equity Trading. He has over 30 years’ experience helping businesses achieve immediate and long-term success.

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