Managing Cash Flow

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Managing Cash Flow
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• This time of year can be unpredictable for
  businesseswhether its a period of increased
  activity or a temporary shutdown. Thats why
  understanding and managing your cash flow is
  critical. Effective cash flow management ensures
  your business remains resilient and ready to
  grow, no matter the season. Here are some
  practical tips to help you stay on top of your
  finances

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• 1. Understand Your Cash Flow
• Start by preparing a cash flow statement. This
  document tracks all cash coming in (from sales,
  loans, or investments) and going out (expenses,
  payroll, inventory). Regularly reviewing it will
  help you identify patterns and anticipate
  potential cash surpluses or shortfalls.

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• 2. Optimise Your Receivables
• Speed up customer payments by offering incentives
  like early-payment discounts and setting clear
  payment terms. Use digital invoicing and send
  reminders to minimise delays.

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• 3. Monitor Your Inventory
• Excess inventory ties up valuable cash. Implement
  inventory management systems to maintain the
  right stock levels and avoid overordering.

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• 4. Plan for Seasonal Variations
• If your business experiences seasonal highs and
  lows, build a cash reserve during peak periods to
  cover slower months. You might also explore
  promotions or introduce new products and services
  during quieter times to boost income.

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• 5. Secure a Safety Net
• Establishing a line of credit or emergency fund
  can provide a buffer during cash flow shortages.
  Its best to arrange financing while your
  business is in a strong financial position, so
  youre prepared when challenges arise.

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• 6. Track and Forecast Regularly
• Use real-time reporting tools to monitor your
  cash flow and create forecasts. Proactive
  planning helps you spot and address issues before
  they become major problems.

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• At iKeep Bookkeeping, we specialise in helping
  businesses manage their cash flow, develop
  budgets and forecasts, and plan for financial
  security. Contact your account manager today to
  learn more.