Cash flow management is one of the important element in any business. Cash flow management needs a strategy to always have cash available and never been in red. So Management should come up with a strategy to monitor its flow (in and out), prioritizing cash payments, optimising cash collection and invoicing.
80% of businesses fail because they ignored this concept. Additionally, borrowing money to stay afloat can ultimately leads to business failure as well. So it is greatly important that your sales should exceeds your expenses. Additionally, ensuring that your sales are all or significantly collectible. So choosing and having good clients are vitally important. Some professionals require a retainer making sure bills are collected.
Can technology help with cash flow management?
Yes, and it is time. If you implement these strategies, you will be in black as long as you are profitable.
- Keep track of time spent on clients’ work and its value. This also can be further analyzing by seeing which of your projects are more productive economically and delegating less profitable tasks. For example, sending and answering email/tel/faxes can be done by your reception at $20 an hour where you may bill for $200 an hour.
- Automate your invoice processing. Please, please do not use word document to draft and send invoices (I used to it in word or excel L)
- You can use Quickbooks online for sending invoices and getting paid
- You can use Invoice Sherpa
- Make payment collection a priority, if possible collect credit card information in advance and keep on file.
- Use a cash flow application such as Helm to monitor your cash flow
- Use a budgeting application such as Budgeto to see the cash needs and forecasting.
- Offer complimentary services to boats your revenues.
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