Cash flow management ideas to make your life easier for Sunshine Coast business owners
Fiona McKinlay • July 16, 2018
Cash flow management means you can pay your bills. Accounts receivable are not the same as accounts received, and even successful businesses can fail without sufficient cash flow — they say that 60% do.
You have to be able to pay your suppliers promptly and satisfy your banks, so any steps you can take to shorten receivables are worthwhile. You might consider giving a discount for early payment — and charging a penalty when payment is overdue.
A high interest business savings account may be useful so that you can earn interest when times are good.
Ask yourself
- Do you know how to calculate your break-even point?
- Is your stock kept at an efficient level?
- Do you follow up on overdue accounts?
- Do you need to review pricing, increase advertising or improve customer service?
- Can you reduce overheads?
- Would you get paid faster by using mobile payment solutions?
- Should you accept credit cards — and should you pay by credit card?
- All this contributes to cash flow — and of course you have to understand your own balance sheet.
Unfortunately buying and selling, which may be what you are best at and enjoy most, are not enough.
And even there, can you calculate profit margins and set profit goals? Have you ever compared your cash flow to other, similar businesses? How accurate are your forecasts? Can you delay your payables?
Loans
A line of credit is cheaper than an urgently needed loan, but perhaps you would like a business loan. It’s one way to access money quickly, but you may need a cash flow projection. Unlike an overdraft, you do not require additional security and the facility is separate to your other bank loans, but if you are considering taking on debt finance how will repayments affect future cash flow?
Conclusion
Do you understand what affects cash flow, from customer and supplier payment terms to loan payments and future spending decisions or would you be happier to outsource the worry and stress to
Balanced Bookkeeping and Business Solutions?
Our Sunshine Coast bookkeeping experts can help you to control your outgoings and increase your profits. They may be an investment in survival rather than an expense.
You might also be interested in Basic reporting that will save you time (and headaches)
And then there are employee payment summaries and the summary of income and expenses in a profit and loss statement, the record of debtors and creditors, asset purchases and expenditure on improvements, depreciation expense claims and capital gains tax, income tax returns and yearly reports, returns for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting system, meeting superannuation requirements… the list goes on and on.
With so many great software options including XERO, MYOB and Reckon. It’s vital for Balanced Bookkeeping and Business Solutions to be on top of them all. Our expert team can help tailor fit any software your business needs. We proudly keep the Sunshine Coast on top of their accounts. Ask us how we can help you today.
Balanced Bookkeeping and Business Solutions is a local Sunshine Coast company that provides a complete bookkeeping service and solutions for small to medium businesses and can cope easily with both the ATO and ACNC, so that you can pursue the far more rewarding and philanthropic business of fund-raising and distributing to the deserving foundation or trust of your choice.
Balanced Bookkeeping and Business Solutions is a local, Sunshine Coast business that provides a complete bookkeeping service and solutions for small to medium businesses. The principal of Balanced Bookkeeping and Business Solutions has worked in the accounting industry for over 20 years and is a qualified accountant and registered BAS agent, which means that you can discuss the pros and cons of casual and full time and part time employment, knowing that you will receive practical, constructive, valuable advice.
So, what is Fringe Benefits Tax? Simply put, it’s an extra tax that you cover for your employee that is for the benefit of the employee in lieu of paying them more money. The tax is calculated on the value of what is being used for FBT.
This is only a new initiative as we mention that came into effect as of the 1st of July 2018, so there are still a lot of questions to be answered. This is why a number of clients we serve on the Sunshine Coast have been coming to us at Balanced Bookkeeping and Business Solutions to see their options.