7 Tips to Manage Your Business Cash Flow Better

Managing your company’s finances is no walk in the park. The movement of funds in your business dictates your profitability or how your finances can fluctuate in the coming years. Effective cash flow management is the foundation of success for any business, ensuring its sustainability and resilience in the face of challenges. 

When you manage your cash flow diligently, you will have enough working capital to survive through the busiest and slowest seasons. Keeping an eye on this pulse not only identifies how much goes in and out of your company, but also softens the blow of any unexpected budget deficit. 

RELATED: How to Prepare a Budget When You Have Irregular Cash Flow 

Tips to Manage Your Business Cash Flow Better 

Cash flow management is a key step in achieving stable financial health. Here are seven (7) tips on how your firm can manage cash flow effectively: 

1. Keep Your Books Updated and Accurate 

Make sure to record your transactions regularly. Identify how much of your funds are allocated for expenditure and how much goes to the company's profit.  

Number crunching saves business owners from possible shortages and makes sure any problems won’t disrupt core business functions. This task may be daunting, but with regular updates in your books, you are likely to know where your business is headed.   

2. Follow Up on Your Invoices 

Once you get your deliverables done, don’t wait to invoice. Your easiest access to cash is your products and services; that’s why it’s advised to invoice your client quickly. This strategy can impose a better turnaround for your finances by letting your receivables slide through faster. 

Read: 6 Easy Ways to Simplify your Sales Invoice

3. Reduce Your Expenses 

One strategy that you can take to reduce your company’s expenses is to combine two key steps: cutting expenses and delaying payments. This kind of cash flow analysis for your business increases your chances of allocating funds for more valuable assets.   

How can you reduce your expenses? 

There are various things you can do to trim down your payables. Depending on the industry, you can opt to negotiate with your suppliers for better buying opportunities, automating your basic bookkeeping tasks by subscribing to an accounting software, and creating relationships with credible lenders, among others.  
 
 

4. Establish Your Own Cash Reserve 

Cash is a pivotal part of any growing business. Backing your business with a cash reserve comes in handy especially when you meet any unexpected fund shortage.  

Having a cash reserve allows your business to venture through financial crises, such as low profit, losses, allowing too much credit or unnecessary expenses. This can also help your firm grab great chances during opportune times.  
 
 

5. Maximize the Technology 

One tip on how to improve cash flow is through integrating technology into your business. Along with this, make sure to monitor your financial status anytime and anywhere through cloud-based accounting software. You can also keep your data safe from any security breaches by storing them on the cloud. Leverage the technology so your business can run smoothly as it grows.  

6. Employ the Right People

Another way to successfully manage and improve your company's cash flow is to work with the right people who understand the ins and outs of cash flow management—such as bookkeepers, accountants and tax professionals. Doing this will give you peace of mind knowing that your finances are in good hands. 

Read Next: 9 Strategies to Attract and Retain Young Accounting Professionals 

7. Seek Advice from a Professional

If you encounter any problems related to your cash flow, then it is best to consult with a finance and accounting expert. They can assist you in understanding complicated financial matters and provide valuable guidance to get your finances back on track.  

You may also consider outsourcing your financial tasks to a third-party service provider, since they can not only give you a fresh and new perspective, but they can also help you reduce overhead costs. In many cases, it is more affordable to hire an outsourcing firm than to have an in-house team handle the workload. 

The Bottom Line 

Efficient cash flow management is a crucial component for businesses, regardless of their size. At D&V Philippines, we understand the challenges and complexities that come with it, and our experts are here to help. Contact us today to learn how we can help you. With our support, you can confidently navigate cash flow management as you scale your business.    

You can also read our whitepaper Outsourcing: How to Make it Work to learn more about how we can help you drive your business forward. 

This post was first published on 22 August 2019 and edited on 26 March 2024. Edited by: Angelica Garcia