With 80% of SMEs failing due to poor cash flow management, ensuring your business
has more money coming in that going out should be highest on your list of priorities.
Many may have already heard the recent announcement from technology company, Apple, whose first quarter profits amounted to a hefty $18bn. Indeed, Apple’s net cash flow has been so positive that its cash reserves now stand at $178bn. With such an enormous mountain of cash, Apple can now lay claim to being the world’s healthiest company.
For the rest of us, who don’t think in billions (yet!), maintaining a positive cash flow needn’t be too hard and there are some very simple ways in which, as a business owner, you can ensure more money enters your company than leaves.
One of the easiest methods is to invoice your customers early. Whilst this may sound relatively obvious, it is often surprising how many businesses become insolvent simply because they’ve allowed late payments to endure for so long. In many cases, the problem can be solved by simply sending a reminder ahead of the due payment date or incentivising early payments by offering discounts or other benefits.
Another straightforward method is to take advantage of lease finance. With lease finance, you can obtain important business assets and pay through a series of instalments over an agreed time period. By opting for this route, you can avoid the pitfalls of investing a lot of money in a one-off purchase and impacting on vital capital reserves.
If you found this useful, why not check out our 10 ways to keep your cash flowing…