Cash Flow Solutions

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Cash Flow Solutions

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Cash flow is the life blood of any business: if it dries up your business can fail, regardless of its prior success. That’s why securing and accelerating your cash flow is one of our most important objectives.

We all know cash flow is important. But as business owners we tend to focus on other things – sales, expenses and profitability. Often, we only pay attention to cash flow when something goes wrong – and by then it may be too late.

The cash flow cycle

Every dollar you invest goes through the cash flow cycle before it comes back to you, bringing some profit with it. The faster the cycle turns, the more successful your business will be.

Let’s say you buy $100,000 worth of stock and sell it at a 40% profit. When the account is paid, you receive $140,000 in cash. Then you have a choice:

Reinvest the full $140,000 in your business and make another 40% on that. The more often you can do that, the more profit you can make.

Keep the same $100,000 investment cycling around your business and use the profit for other purposes. The faster the cycle turns, the less money you need to plough into your business

Cash flow warning signs

You could be having cash flow problems if:

Your suppliers regularly go unpaid for more than 60 days
You have frequent disputes with suppliers or change suppliers regularly
You often lodge BAS statements late
Employee super payments are significantly in arrears
Suppliers insist on cash-on-delivery

Keep your cash flow flowing

The reasons cash flow stops flowing usually fit into one of five key problems. The ideas and solutions below provide solutions to the top five problems, so that you can manage your business cash flow better.

Top five cash flow problems

[/vc_column_text][vc_tta_accordion style=”outline” color=”black” spacing=”3″ c_icon=”triangle” active_section=”7″ no_fill=”true” collapsible_all=”true”][vc_tta_section title=”Failing to plan for market volatility and changing conditions” tab_id=”1495078169835-e0f82fac-de02″][vc_column_text]Monitor your environment. Tools can help you predict a slowing sales trend

Be prepared for the effects of higher costs (this could impact your stock, salaries or other areas of your business)

Consider using risk management tools to reduce your exposure to changing interest rates, commodity prices and exchange rates, and use business risk insurance to protect your assets and your income

Use an online tool like to stay on top of your cash flow position by seeing your transactions in one location[/vc_column_text][/vc_tta_section][vc_tta_section title=”Tying up capital in stock and equipment” tab_id=”1495078169836-00690dae-a94e”][vc_column_text]Turn over excess stock, even at a discount

Consider using leasing solutions for equipment, instead of tying up cash[/vc_column_text][/vc_tta_section][vc_tta_section title=”Buying long-term assets out of current cash flow” tab_id=”1495078502502-9728d2fb-eac6″][vc_column_text]Use longer-term lending solutions for capital assets

Match the length of the loan to the life of the asset[/vc_column_text][/vc_tta_section][vc_tta_section title=”Collecting accounts receivable too slowly” tab_id=”1495078577775-3992a07e-e521″][vc_column_text]Monitor accounts receivable carefully

Have a system in place to follow up overdue accounts

Use electronic payment solutions to put cash in your bank account faster[/vc_column_text][/vc_tta_section][vc_tta_section title=”Failing to put excess cash to work” tab_id=”1495078629332-414e67e6-07ba”][vc_column_text]Look for cash reserves in your business, such as cash you’ve set aside for stock or GST that can be put to work

Earn extra profits for your business using the right investment product for the length that you can invest (eg Business Online Saver for short term and a Term Deposit for long term)[/vc_column_text][/vc_tta_section][/vc_tta_accordion][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]