5 Accounting Cash Flow Hacks to Keep Your Business Running Smoothly

If you’re not giving cash flow management the attention it deserves, you could be putting your business at risk. Tracking cash flow isn’t as scary as it seems. Here are the top 5 hacks for improving your business cash flow:

When you've completed a job, you want to get paid quickly. Creating and sending invoices, especially in a complex business, is almost always time-consuming and challenging. Systemising this process, creating a tracking system, and keeping up with the task will make a big difference in your cash flow. Setting clear expectations with your customers for how often and how much invoices will be is another key piece to getting paid quickly.

Fortunately, software like Xero helps by automating the invoicing process, creating a paper trail so you can track invoices, and allowing customers to pay online. The easier you make it for clients to pay, the better your cash flow will be!

Cash flow forecasting is all about predicting your future bank balances based on expected cash inflows (like revenue and investments) and outflows (like salaries and expenses). A solid cash flow forecast provides real-time visibility into your financial health, empowering you to make informed decisions regarding hiring, investments, and payment schedules. For example, if your forecast shows a potential shortfall next quarter, you can prepare by adjusting spending or exploring financing options. This proactive approach helps you spot red flags early, such as unexpected expenses or payment delays, preventing larger financial crises down the road.

It’s very common for service-based businesses to run into cash flow problems due to the late payment of their invoices. According to Xero, more than 40% of invoices are paid late. Top business accounting software systems like Xero have an invoice reminder system that will automatically forward your customers an email when their invoice is coming up for payment, and/or when it falls past due.

This is essential if you want to understand your business cash flow and forecast how it might change. Mixing your business and personal finances can leave you uncertain about business performance. Xero lets you easily separate your business and personal transactions, so your records stay organized and clear. So keep them separate. That way, you'll know how much cash your company is generating. Then you’ll be in a good position to properly pay yourself and use excess cash to strengthen and grow your business.

A bookkeeper can be one of the most important hires your organization ever makes. Hiring a reputable bookkeeper can help you regularly input and consolidate your incomings and outgoings, generate reports, and form recommendations for your consideration. An experienced bookkeeper can able to think ahead and anticipate needs before they arise. They will have a good experience to understand the bookkeeping requirements of your industry.

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Everyone deserves a supportive team of people who care. Cloud Bookkeeping Inc.’s team provides monthly bookkeeping and accurate financial reports. We’ll give you financial visibility throughout the year and deliver insights to make strategic business decisions.

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