BAS Checklist
20 January 2023
5 Top Reasons Why You Should Outsource Your Bookkeeping
9 March 20233 February 2023
Businesses can be particularly vulnerable during difficult economic times. When sales are slow, there are still bills and salaries to be paid. One essential aspect of pre-planning for economic downturns is managing your cash flow effectively.
Cash flow is the amount of money that flows in and out of your business over a particular period. During challenging economic times, it's critical to have a positive cash flow to ensure that you can meet your financial obligations.
Reduce your expenses
One way to improve your cash flow is to reduce your expenses. Look for areas where you can cut costs without compromising the quality of your products or services. This might involve renegotiating contracts with suppliers, reducing staff hours, or finding ways to be more efficient with your resources. Make sure you have a clear understanding of your payroll and any other expenses that will need to be covered.
Strategies to minimise cash flow stress
1
Invoice early
Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.
2
Chase payments & maintain good communication
Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to customers and chase invoices.
3
Talk to suppliers & consider lines of credit
A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.
4
Review inventory & find more cost-effective suppliers
Can you find a cheaper supplier locally to avoid the shipping costs or discuss alternative products that allow you to reduce expenses?
5
Regularly review expenses & find alternative approaches
It’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide on an alternative approach to.
6
Talk to bank & tax department early
If cashflow is tight, make sure you have conversations early so you have everything in place to see you through.
By managing your cash flow effectively, you can help ensure that your business remains resilient during challenging economic times.
Have a question?
Book a free consultation with us. With a dedicated team of bookkeepers and CPA accountants, we can help implement these strategies for long-term success.
