How to overcome cashflow issues in your business

With a long list of expenses including your rent, wages, equipment costs and stock, taking control of your cash flow can seem like a challenging task. However, this doesn’t need to be the case.

It is important to look at your cash flow projection. This will allow you to understand exactly where your business stands, so you can predict shortfalls, plan for major expenses, and provide important details to prospective lenders.

There are a number of strategies your business can implement to manage your cash flow better. One way this can be accomplished is by reducing your outgoings. You may be able to cut your costs by reducing utility use, reviewing your insurance, phone and internet services, or negotiating with your landlord or suppliers for reductions.

Below are four tips to help your business manage your cash flow more effectively whilst improving the productivity and success of your business.

Cash flow forecasting

Ensure you are using cash flow forecasting. This can give you a great insight into your future cash flow.

You can predict which months you will see a deficit and which months you might find yourself with a surplus, enabling you to forward plan better. For example, if your forecast indicates that your cash flow might dip next month, you can act immediately to cut down on your business expenses to minimise the impact on your cash flow.

Loan consolidation

You may be able to consolidate your business loans, this could reduce and simplify your monthly repayments. If you have several loans and credit cards associated with the business, consolidating these into one low-interest product could save you thousands, freeing up that valuable cash to use elsewhere in the business.

Reduce your expenses

Reducing expenses is often a common approach to solving cash flow issues, but it’s very easy to go about this in the wrong way by cutting down on areas that reduce your ability to generate revenue. The key is to focus on expense-reducing measures that will maximise your cash flow and not impact business operations.

Capital raising

Raising capital through your business assets could help solve cash flow issues both short and long term whilst providing taxation benefits.

For example, you might require capital raising for any of the following:

• To assist with the purchase of unique and specialised goods
• A simplistic way to restructure a partnership or company position
• To provide taxation benefits as well as generate cash flow for the business
• To redistribute cash flow from previous business purchases
• To provide cash flow/liquidity during unpredictable/seasonal/cyclical periods
• To assist with unforeseen expenses such as mechanical repairs, unexpected creditors, legal fees, and tax payments

Contact Morris today on 1300 4 MORRIS and talk to one of our finance specialists to see how we can help improve your cash flow.