Last Updated on July 17, 2019 by New-Startups Team
Your company’s cashflow is its lifeblood. When this flow is positive, everything is good and you can start making plans to grow and improve your business going forward; when this flow is negative, well, that’s not so good. A negative cashflow can result in any number of difficulties arising — allow your finances to suffer for too long in this instance, and you could face a winding-up order.
No matter how strong and steady your cashflow may already be, you should always be looking for ways to improve it. Act like the wolf is always at the door, and it’ll never come knocking…
Here are three ways you can improve your company’s cashflow:
Strengthen your accounting department
Your accountants are the ones that handle your company’s cashflow day in, day out. It makes perfect sense, then, to seek to strengthen them in this instance, as the more skilled and adept at handling money they become, the better off your cashflow will ultimately be.
When it comes to strengthening your accounting department, you have two options: improve your current accounting workforce, or hire new staff members. With regards to the latter, it’s crucial that you double-down on your recruitment efforts; you can’t just hire any old accountant, you need to hire the right one. More often than not in this instance, the further an accountant has delved into the world of education, the better equipped they are at dealing with business intelligence and corporate finances. Should an applicant have completed a Master of Science in Accounting degree, for example, you will be able to be sure that they will have a knowledge of data management, that they will be able to understand what motivates fraudulent behavior, and that they will know how to deal with financial forecasting. All of these skills could prove vital to you as you seek to improve your company’s cashflow, so giving these types of applicants the chance to apply to your job openings is crucial.
Send out your invoices right away
Whenever you have an invoice ready to send out, don’t delay and send it out right away. You’re not going to improve your cashflow if you’re constantly owed money, so you need to ship your invoices out as soon as you possibly can, as often as you possibly can.
Staying on top of your outstanding debts in this manner will see you earn money a lot faster. Ultimately, this will give you a tight grasp over what you can and cannot afford to spend, which will stop you from doing damage to your cashflow.
Sell any unwanted assets that you have
Whether you’re in a position where you desperately need a cashflow injection or not, selling unwanted assets is a great way to strengthen your business’ finances. Where’s the sense in allowing something to, quite literally, gather dust when it could make you a pretty penny at auction? It’s really very simple: if there’s something you are no longer in need of, put it up for sale and hope it goes for a high price. Taking this action could even see you reduce your storage costs.
As a company owner, one of your most important tasks is to improve your cashflow. Follow the above advice, and you’ll be able to do just that.