Our best tips for managing your cash

How can you ensure your business stays profitable and healthy, whatever comes your way?

It’s all about organisation!

Here at Complete, we believe managing cash is one of the best things you can do for your business. Although it sounds obvious, it’s so often overlooked. It’s no secret that most businesses fail due to cash flow issues. But why is that?

Without a proactive approach to managing cash, you’re setting yourself up to fail.

Ever found yourself having cash flow problems, and wishing you’d done something sooner? The best way to manage cash flow is by staying ahead of the curve. Having a solid cash flow strategy in place puts you in a massive advantage, as you’re able to spot cash problems well in advance, then tackle them head on, rather than scrambling to find extra funding after they’ve hit.

A simple shift from being reactive to proactive can do wonders for your cash flow and it’ll give you the peace of mind that there’s money in the bank. And who knows, applying a more proactive approach could help you improve any area of your business!

So let’s talk about how you can create a foolproof cash flow strategy to maximise your cash and stay in the green.

Ensure your accounts and bookkeeping are always up to date

To get an accurate view of your cash flow, you need accurate data.

Think of managing your bookkeeping as the first step to a successful cash flow strategy. Cash flow forecasting software like Float will pull data from your accounting solution, so if you’re working with incorrect or out-of-date information, your forecasts will be inaccurate too! Set time aside regularly for bookkeeping, bank reconciliation and automate the process where you can and things will run along smoothly.

With apps like Receipt Bank, it couldn’t be easier. It’s as simple as photographing your receipts and uploading them to Receipt Bank, then the app will publish them to your accounting software. All that’s left to do is reconcile them!

Although it sounds pretty straightforward, it’s super important to get this right. That’s why we’d recommend having a bookkeeper in house or hiring a good accountant to take care of it for you.

Use cash flow forecasting software

A basic cash flow template can be a great place to start for freelancers and small businesses. But if you’re looking for more high-level and detailed cash flow projections, you have a large, rapidly growing limited company or you have a lot of expenses and fluctuating incomings and outgoings, let the software do the hard work for you! Estimating these types of forecasts manually can result in mistakes and human error. And mistakes mean inaccurate cash flow forecasts! Plus, it’s just downright time consuming.

Software like Float removes the stress and error that comes with doing manual cash flow forecasts. And it’ll provide you with highly detailed, accurate and visual forecasts, allowing you to easily understand your finances and get a clear overview of the future health of your business. No more headaches and wasted afternoons from filling out complicated Excel spreadsheets.

You can find out more about Float and cash flow forecasting here.

Take advantage of cash flow tools in Xero

We know cash flow can be a headache, but luckily there’s lots of tools that can take the stress away and do most of the hard work for you.

With Xero, you can get an overview of your total cash in and cash out on your dashboard to quickly visualise your current cash position. And with the Cash Summary tool, you can drill down into more detail about the movement of cash in and out of your business. 

These are great tools for keeping an eye on cash flow on a daily or weekly basis, and if you’re new to the world of cash flow management, they’re a great place to start.

Again, these reports will only be accurate if your information in Xero is up-to-date, otherwise it all falls down. If you don’t keep the bookkeeping up-to-date, it will skew your whole reports!

Give yourself enough time to plug a cash flow gap

Being proactive is essential to running a profitable business. Once you’ve identified the need for funding, it’s crucial to act quickly and source the right finance options.

With cash flow, failing to plan is planning to fail. By not giving yourself enough time to plug a short-term financial gap, a rejection from a lender or undesirable loan terms could mean the difference between plain sailing and stormy waters.

Tighten up the processes

Struggling with late payments every month? Or don’t have a proper process for managing payments? Why not collect payments via direct debit instead?

Getting paid faster is one of the quickest ways to manage your cash flow. With tools like GoCardless, you can collect recurring payments automatically, which means no more gaps between sending invoices and receiving cash. 

And with Xero, you can set up repeating invoices to go out automatically to clients, helping you streamline your payment process. You can also send invoice reminders to follow up on unpaid invoices or to let your customers know when their due date for payment is approaching. 

These are quick wins that can make all the difference to your monthly cash flow.

Keep your eyes on the horizon

Good things come to those who plan. Keeping an eye on the future is key to staying on top of your cash flow. 

As a business owner, you probably have big goals for where you want to take the business. These will directly impact your cash flow, so it’s important to plan properly before diving headfirst into action. 

So what are your goals? They might be to grow your business, hire a new member of staff, or maybe cut back your hours to spend more time with loved ones. Whatever they are, it’s important to plan for them. Once you’ve established your goals, you can start to test out these different scenarios in Float and visualise the impact they’ll have on your cash position. That way, you can make more confident decisions that will benefit your business in the long run.

Preparing for long-term success

Running a business can be exciting, but it can also be challenging. With a clear cash flow strategy and the right technology in place, you can remove cash-related hurdles and set yourself up for long-term success. 

Need more advice on managing your cash? We've got you covered.

Here at Complete, we're experts at managing cash flow. We can work with you to create a failsafe cash flow plan. We'll show you how to use cash flow forecasting software, take the time to learn about your goals and how best to plan for them. Because when you're happy, we're happy. 😄


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