Brew Accounting

  • Home
  • Resources
    • Blog
    • NewsLetter
  • Solutions
    • Individual
    • Hospitality
    • Business Accounting
    • Business Planning
    • LookOver - Second Opinion on Tax
    • LookOver - Business Health Review
  • Our Service
  • Team
  • Contact
  • Home
  • Resources
    • Blog
    • NewsLetter
  • Solutions
    • Individual
    • Hospitality
    • Business Accounting
    • Business Planning
    • LookOver - Second Opinion on Tax
    • LookOver - Business Health Review
  • Our Service
  • Team
  • Contact

Maximising your cash reserves

17/7/2020

0 Comments

 
Picture
​If the #Covid-19 crisis highlighted the inadequacy of the cash reserves in your business, you must implement strategies replenish your reserves and ensure you have enough cash to sustain your business. We can help!

The Covid-19 crisis has highlighted the inadequacy of current cash reserves for many businesses. They simply don’t have enough cash to sustain the business in a crisis.
Now is the time to make permanent change to your business processes and cost structure so you can build those reserves. At the same time, business owners need to be part of a world solution, and that means paying our bills on time where possible.
11 strategies to maximise your cash reserves:
  1. Invoice your customers immediately upon supply of products and services. The faster you bill, the faster you’ll be paid.
  2. Shorten your payment terms, e.g. from 20th of the month to within 7 days of invoice. You’ll need to reflect any changes in your Terms of Trade, in key customer contracts, and on your website.
  3. Invoice directly from your accounting software. This can enable faster payment.
  4. Negotiate prompt payment discounts with your suppliers. Don’t be bashful, there is no harm in asking.
  5. Get better at collecting the money you’re owed. Ask nicely to be paid by customers as soon as an invoice is overdue. The fast cash is in the 30-day column, not the 90-day column.
  6. Outsource proactive debtor management to a collection agency. This can be surprisingly cost-effective.
  7. Perform credit checks on new customers and make sure your Terms of Trade give you as much protection as possible if a debt goes bad. For example, put personal guarantees in place.
  8. Develop a personal spending budget and stick to it. This will reduce cashflow pressure on the business.
  9. Take costs out of the business where you can, but only where you should. This is an ideal time to review every line item in your Profit and Loss Statement. The shift to working online may allow you to change spending patterns.
  10. Have clear spending limits for team members who incur expenses on behalf of your business and regularly monitor these.
  11. And finally, prepare a Cashflow Forecast. Know what’s ahead of you and understand how positive changes will improve your cash reserves going forward.
Cash is oxygen for your business. Contact us now so we can help you put a cashflow improvement plan in place.
​
“The more a business owner knows about their cashflow, the more empowered they become.” - Nick Chandi
We are here to help, contact us today:
Brew Accounting Pty Ltd
Phone 0405 027 250 | Web brewaccounting.com.au
Email joanna@brewaccounting.com.au
Suite 7/104 Crown St, Wollongong NSW 2500
Content originally published by BOMA. We have updated some of this article for our readers
0 Comments



Leave a Reply.

    Archives

    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020

    Categories

    All
    Financial Awareness
    General
    Management & Strategy
    Payroll
    Sales & Marketing
    Superannuation
    Tax / Compliance


      Learn More

      Get monthly updates with
      ​the latest news and insights. 
    Subscribe
Call: 1300 273 900 today and speak with one of our friendly Accountants.
Book a Meeting
Picture
Brew Accounting is a CPA practice.
Picture
Registered Tax Agent
Picture
Chartered Tax Advisor

​copyright(c) 2021 Brew Accounting