info@pracpartners.com.au
1300 591 544
The rapid spread of the virus not only caused a health disaster but also prompted a global financial catastrophe. Businesses worldwide face a dramatic economic slump, with financial casualties worsening than ever before due to a complete halt in economic operations and interrupted supply networks. Now in such time, maintaining a good client connection, as well as having a smooth cash flow management, becomes even more important for businesses to stay afloat. So, as your accounting partner, here we will discuss five excellent strategies for cash flow assistance for businesses. Let’s get started.
1. Invoice Your Clients on a Regular Basis
The sooner you ask your customers to pay, the faster the money will be in your account. Develop the habit of billing your clients on a regular basis. In fact, producing invoices on time will assist shorten the time to receivable, allowing firms to maintain a consistent cash flow. To obtain payment and decrease the paper trail, businesses can send e-invoices.
2. Reduce Overhead Costs
Increasing cash flow by cutting costs is a tried and effective strategy. Check your overhead cost to determine if there are any places where you may save money as a general rule. Is it possible to save money by lowering your rent or cancelling subscriptions for products you don’t use very often?
3. Concentrate on Inventory Management
In order to forecast supply-demand levels and cash flow, businesses must have a comprehensive grasp of their inventory. Inventory should be checked on a regular basis to see what’s hot and what’s not. This can aid you in inventory planning and getting rid of dead items at a lower cost.
4. Revisit Capital Investment Plans
Recent developments in the global economy, fuelled by the Covid-19 epidemic, have prompted us to reassess our financial portfolio. So, it’s necessary to fine-tune and re-evaluate major Capital Investment selections. Your primary goal in making a capital investment should be to raise the value of your company by taking on a suitable project at the right moment.
5. Think of Alternative Revenue Generation Stream
Many businesses have already begun to consider alternative revenue streams in order to survive in this challenging market, which has been severely impacted by the Covid-19 lockout. So, consider additional options for recouping losses and making your company more robust and stable in the long run.
5. Open Communication
In a crisis, it’s important to keep everyone informed about the company’s financial situation, both internally and externally. Some business owners may be apprehensive about discussing money with consumers and suppliers. However, in the event of a national or global catastrophe, they may be affected as well. They’ll be understanding and, hopefully, accommodating.
In a nutshell, at this point, the most critical thing is to keep your cash flow flowing and walk the extra mile to eliminate or reduce the pandemic’s effects. The uncertainty surrounding the pandemic has made us think twice and think harder about the path forward, from our day-to-day operations to asset management to people and how we want to shape the company going ahead. For more assistance, speak with us to protect your company’s financial well-being and manage cash flow during a crisis. Call Practice Partners at 1300 591 544 and our CFO accounting services from our experts will guide you in every process. Join us today!