Overspend at Tax Year End? Here's Some Quick Cashflow Management Tips for July Onwards

With the end of the financial year upon us some business owners have taken advanatge of great year end deals to buy new equipment. But how are you going to manage the cashflow shortage in July? Here are some free tips.

Cashflow Forecast

The one big gap we see time and time again in business is where there is little or not cashflow forecasting done. We are not talking complex, detailed models, all we mean is some sort of simple excel spreadsheet that shows when you will or won't run out of money. It really is very, very easy to do this and makes it a lot easier to sleep at night. For a free simple daily cashflow forecast model please email us on info@avegna.com.au and request a copy.

Collections

It is simple but true "if you don't ask you won't get paid". Struggling to collect money from customers?  Put an official collections process in place and stick to it. Consistency is key and your customers will learn they need to pay sooner once you start chasing them up. Again we can provide a free, simple collections process and the reminder templates for this. Just email us on info@avegna.com.au and request a copy.

Bank Facilities

Talk to your bank manager. Regularly. The more regularly you talk to them the more likely they are to "lend" a favourable ear to your application to extend your overdraft or take a line of credit. If your bank manager won't help go and talk to another one. Make it known to them that you are keen to borrow and someone needs to help you. At least one of the banks should be able to help. We reguarly assist clients with arranging bank loans, email us on info@avegna.com.au for more information.

Discounts

Offer discounts for prompt payments by your customers. And don't forget to tell them you are offering them, literally. It is all very well to print it on your invoices, but actually call them and tell them. People take notice when you talk to them. Highlight the discount on your invoice.

Advance Deposit Discounts

Another way to get customers to pay earlier is to offer bigger discounts for deposits upfront. This can take several different forms. For example how many times do you go to a certain furntiure or household goods store to buy something only for your purchase to be delivered a few weeks later even though you have paid upfront to secure the good price?  It happens often. Call it what you want, deposit discounts can make a big difference to your cashflow.

Debtor Financing

Another possible tool is Debtor Financing. This is where banks and financial institutions lend you the money your customers owe you as soon as you invoice your customer. So you don't have to wait the 60 to 90 days to get paid. Not for everyone but can be useful in some businesses.

Cheques & Credit Cards

We have seen businesses even using cheques to buy themselves a few days cashflow. Cheques can take upto 4 or 5 working days to clear. If you are in a tight spot, perhaps a good old paper cheque is called for. The credit card companies are famous for throwing money around. Perhaps a new credit card at a great introductory rate might help you get through that tough period until you clients start paying again. But as with all financial management careful planning is required to ensure this doesn't end up costing you interest longer term. Consult your accountant to ensure you are using these facitilies at the cheapest interest cost.

Avegna assists business owners with these issues on a daily basis. We work with businesses helping them to implement real world, practical changes in their business to ensure their continued growth and success. For further information on how we can assist you in your business please call us on 1300 797 535 or email us on info@avegna.com.au