You may have the best idea on the planet, a million investors knocking on your door and a team of skilled professionals standing behind you but if you can’t nail down your cash-flow management, your business will ultimately fail.
The Australian Securities and Investments Commission released a report into corporate insolvencies for 2014-2015 and found that inadequate cash flow and poor strategic management were the top two most nominated causes of failure for business.
So, where do businesses go wrong when it comes to cash-flow management? Let’s take a look at three of the most common mistakes.
1. Overestimating sales volumes: It can be hard to master the act of predicting sales volumes. However, unrealistic predictions can cause excess volume and wasted funds. Use concrete numbers and historical figures to calculate sales volumes in the most realistic fashion.
2. Lax invoice policies: According to a study by PayPal and Intuit Australia, at any given time SMEs are owed an average of $13,200 – a deficit that forces over a quarter of small businesses to take out loans as coverage. Create strict invoice policies, communicate them clearly to your clients and manage the process closely to ensure you maintain a healthy cash flow.
3. Believing in passive income: Revenue needs to managed at every single stage – from beginning to end. There is no such thing as cash flow that can be left alone. Be meticulous in the oversight of every dollar coming in and out of your business.
The one-stop solution
What if we told you there was a single solution that could address all three of the problems? Business management software allows leaders to optimise all of the processes related to the difficulties above. Here at Advanced Business Managers we pride ourselves on providing SMEs with a leading platform that addresses a variety of core business functions, cash-flow management is no exception. With ABM’s Core Accounting System, you can:
- Manage the entire sales process, from the initial enquiry to the completed order.
- Leverage stock control systems for more accurate reporting and inventory volumes.
- Better track finances to ensure the optimal use of all funds.
To learn more about how ABM’s Core Accounting System can help improve your cash-flow management, as well as a variety of other functions. Try out a free demo today!