We are living in uncertain times right now. The situation changes daily with new challenges to overcome. Small businesses are particularly vulnerable in tough economic times like this.
When sales are slow, there are still overheads and salaries that need to be sorted. Pre-planning and being proactive can help you weather tighter economic periods and other planned expenses that will need to be accounted for.
Here is a few tips to follow in order to minimise the stress of cashflow:
- Invoice Early
Send any invoices that you can during the month, rather than just at the end. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make purchases from you in advance.
- Chase Payments
Use this opportunity to chase up any outstanding payments. Strong communication and relationships with clients & customers matter, so talk to them and chase up invoices.
- Talk to Suppliers
A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them, In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.
- Review your Costs
Conducting a general review of expenses is also a good idea. Business costs can creep up, and it’s a great idea to make time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs.
- Talk to the bank or Tax Department
If cashflow is tight, make sure you have conversations with your bank early so you have everything in place to see you through. It is also important to talk to IRD as soon as you know you might have trouble meeting your tax obligations.
If your cashflow is keeping you awake at night, contact us and we can help sort through some strategies for your business.