Effective cash management is important in any business. Poor cash management can lead to a whole host of issues within your business such as the inability to pay your bills.
With this in mind, we have looked at five ways you can improve your cash management, regardless of the size of your business. It is also worth noting that none of these methods are particularly expensive to implement, merely requiring you to re-think a few elements of your business:
Adopt an EPoS System
Having an efficient EPoS system can automatically track all incoming payments and changes to inventory as it processes a payment for your service or product.
Profits can also be maximised with EPoS software, such as our CES Touch program, with fast and accurate reports on a daily, weekly, or monthly basis. These reports can link directly into our cloud reporting software, which allows for a wider range of detailed reports to help keep you on top of your business.
All transactions are recorded so that when it comes to closing at the end of the day, you can ensure that any and everything has been accounted for accurately.
Know Your Breakeven Point
You cannot continue to turn a profit unless you know your breakeven point. An important reason to calculate this number is so that you can understand all of your ongoing expenses, and if the point is too high, you can assess what you need cut. Calculate this number along with taxes, expenses and income so that you can be proactive when addressing your costs if they start to rise.
Have Money in Reserve
Maintaining some money in reserve is important for a business. If for example, you have a bad month and you are hit with an unexpected cost, you can use that money to pay the bills without going into debt. It is a good idea to put your profits into cash reserves first before you grow the business, in case of emergencies hitting you unexpectedly.
Use Incentives to Increase Sales
Everyone loves a good deal, so tempting your customers with incentives is potentially a good way of increasing your sales while not costing a lot to implement.
For instance, coupon codes are a good idea. You can email a customer a coupon to entice them to return to you as a repeat customer. The coupon doesn’t cost you anything to send and may bring back repeat business in the future for a fraction of the price of gaining a new one. You could also look into sponsoring a competition and give away a product or service; the items don’t have to cost a lot, while it could result in a good amount of coverage.
Collect Receivables As Soon As Possible
Many businesses end up under financial pressure due to delivering goods and services without receiving payment. This may result in you paying interest on loans taken out to cover your shortcomings, as there is no pressure on your customers to pay immediately. You should keep purchases like these to a minimum, and give your customers incentives to pay for goods and products straight away.
All of these measures are easy to implement and can help to improve your business’ cash flow in the long term. If you require assistance with your EPoS system, please feel free to contact us.