Tools and tips for cash flow management
Here are two cash flow management tools you can start using straight away, plus tips for responding to dips in cash flow and encouraging long-term growth.
At a glance
Here’s a snapshot of the article’s insights:
- Get started on consolidating your business’s bottom line with our cash flow forecast template and profit and loss projection tool.
- Choosing an appropriate pricing strategy can be critical to get the most value out of your products or services and therefore boost cash flow.
- If keeping track of revenue and expenses is proving tricky, consider hiring a professional.
- If you have a cash reserve to fall back on during challenging times, you won’t regret it.
Managing cash flow is a priority for many small businesses, with 17% of small business owners saying cash flow and business demand are the number one concern they are facing.*
Here are two cash flow management tools you can start using straight away, plus tips for responding to dips in cash flow and encouraging long-term growth.
Tools for managing cash flow
Get started on your long-term cash flow management straight away with these easy-to-use tools from Prospa.
Cash flow forecast template
A cash flow forecast is an indicator of the business’s future cash position. Among other things, it can help you to predict a cash shortage or surplus, and compare income and expenses for different periods.
With its instant calculations, a cash flow forecast calculator can help you spot trends and tackle cash flow issues before they become a crisis – strengthening your business’s base as you approach the end of the year.
Profit and loss projection tool
Not only can a profit and loss projection tool help you see how your business model is faring with a few quick expense calculations, but it can also help you look to the future and develop projections, sales targets, and pricing for goods and services.
Make the most of your cash flow forecast by:
- Choosing a regular cadence and sticking to it
- Make forecasting a team effort by consulting your employees, if you have them
- Using digital tools, such as your accounting software
- Taking the findings and feeding them back into your sales strategy
Top tips for cash flow management
If you take nothing else from this article, it’s the following tips for managing cash flow.
Use an accountant
If keeping track of revenue and expenses is proving tricky, consider hiring a professional to assist you in understanding the cash flow impacts that your business may face as we head into the end of the year.
Think about pricing
Choosing an appropriate pricing strategy can be critical to get the most value out of your products or services; boost cash flow and earn your desired profit; compete with rival businesses; and avoid overcharging your customers and suppliers.
Get smart with your invoicing
Have a disciplined approach to keeping the books up to date, prompt invoicing, and clear payment terms so payments are made in good time.
Review business budgets
Spend wisely. Review any technology and software subscriptions, stay on top of stock management, and consider the potential return of any expenditure.
Save
It might seem like saying the obvious, but if your business has a cash reserve to fall back on during challenging times you won’t regret it.
Further reading
Finally, available on the Prospa blog are all manner of insights from small business owners about how they’ve boosted cash flow for steady but sure growth. Read about how:
- Five business owners are driving growth, boosting cash flow, and protecting their bottom line in the face of rising costs
- Deciding on a pricing model that suits your business can help you prioritise your bottom line
- Making the most of access to credit can boost cash flow
Consider how these suggestions might be relevant to your business and could inform future planning.
*RFI New Zealand SME Banking Council, May 2023
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