There are many reasons I learned why you should know how to handle your life Cash flow flawless. Of all the companies that fail, 82% fail due to cash flow issues. It’s something I never wanted to deal with, but I can promise you that, like most entrepreneurs, cash flow was almost my downfall.
With that in mind, I’ll share some of my cash flow management tips as an entrepreneur.
Know your cash flow cycle
Do you know your cash flow cycle? According to a study I read, only 45% of business owners review their cash flow statements. No wonder 82% of companies fail.
Your cash flow cycle is essentially how cash flows in and out of the business. Technically, my cash flow cycle would be the time it takes to convert investments in stocks, marketing, etc. into cash flow from sales.
How I do it
Monitor inflows and outflows: I record all cash inflows (sales revenue) and outflows (expenses, taxes, loan repayments).
Study pattern: I analyze my cash flow patterns for past periods to predict future peaks and troughs. This helps me prepare earlier and not get unprepared.
Make adjustments: I revise my budget or spending as needed. For example, if certain seasons tend to see a decline in income, I reduce expenses. However, I know that business is quite unpredictable.
Accelerate payments for a better customer experience – a case study from iGaming
Customers want quick payouts when I owe them something — that will always be the case. Faster payments are not only great for my books, but can also significantly improve the customer experience. Fast transactions make everyone happy, suppliers get their money early enough and buyers receive the goods promptly, which creates an atmosphere of trust.
Let’s take casinos for example. Speed matters. Instant payouts have become incredibly popular, especially in recent years as we become more accustomed to instant online experiences. 5G and other technologies that speed up and streamline experiences mean that the speed at which payouts are made is a key focus for review sites. For example, askgamblers.com regularly update their ranking of casinos with fast payouts.
How I do it
Automate payments: To avoid delays caused by human error or forgetfulness, I use software that automatically processes payments whenever they are due. There are probably hundreds available now; It’s not difficult to find a good one.
Offer more payment options: The greater the variety of payment methods available, the easier and faster customers pay their bills to me. Think PayPal, Visa, Mastercard, eWallets, etc.
Be clear in communication: I always tell my customers exactly when to expect their payments. This also helps to avoid misunderstandings.
Keep track of your bills and what people owe
Monitoring of invoices and the money people owe my company is a must. Unpaid bills can impact your cash flow and make it difficult to cover expenses or invest for growth.
How I do it
Set specific payment terms: Before I work with a client, I agree on clear payment terms — within 30 days is a good rule of thumb that I like to follow.
Follow up quickly: I don’t hesitate to remind someone of an overdue bill. Sending automatic reminders at regular intervals usually prompts the debtor to take action. Sometimes people forget – we are all human.
Encourage early settlements through incentives: To speed up the inflow of funds, I offer discounts or other rewards to customers who are willing to pay before the due date. Trust me, you can never go wrong offering a discount.
Control what you spend
Spending control is essential. Unaudited editions Funds can be quickly depleted, which can result in all operations in my company coming to a standstill because there is not enough working capital to handle day-to-day operations, including paying supplier invoices or staff salaries, etc.
How I do it
Come up with a budget: A comprehensive budget that compares expected revenue streams with expected expenses helps me tremendously. I always try to stick to this financial plan as closely as possible so that not a single coin is left out. It helps in the success of organizational goals and objectives.
Re-evaluate costs frequently: By reviewing my spending regularly, I can identify areas where I can cut back. Considering recurring costs that may need to be cut overall is an equally important part of effective savings.
Negotiate better conditions with suppliers: Whenever necessary, I do not hesitate to negotiate favorable terms or ask for discounts from my suppliers. I can promise you that people will be asking you for discounts all the time, so you might as well say it back to them. In the long term, these steps can significantly reduce the overall cost of running a business.
Cash flow management can be easy…sometimes. One of the most important tips I have for you is to understand the cycle that my money goes through. Incorporate these techniques into your business strategy today and see how they help you grow. Or, if anything, how it will help you stay afloat.
