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Cashflow management doesn’t have to be complicated!

Date: 6 April 2023

Uncertainty about your current and future cash position can be a significant source of stress for business owners.

As an SME (small or medium enterprise) owner, it’s likely that you’ve experienced the anxiety that comes with managing your business’ cash flows. It’s a common challenge that many SMEs face and it can leave you feeling like you’re flying the business blind.

That said, forecasting cash flow isn’t as difficult as many SMEs make it out to be. In fact, the majority of cash payments are recurring and their timing is predictable. For example, payroll, BAS, PAYG instalments, superannuation, and creditor payments are all expenses that are paid with fairly predictable timing.

By keeping track of these expenses and forecasting your cash flow, you can get a clearer picture of your cash position and plan accordingly.

Cash receipts from customers are also more predictable than many SMEs appreciate. By keeping track of sales data and analysing trends, you can forecast your cash inflows and plan accordingly. Additionally, implementing systems such as payment reminders and incentivizing early payments from customers can help improve cash flow.

By having the right systems and processes in place you can be confident about your cash position and have more confidence running your business. Implementing a reliable cash flow forecasting process provides peace of mind for SMEs, allowing you to make informed decisions, mitigate risks and seize opportunities.

In conclusion, managing cash flow is a crucial aspect of running a successful SME. Reliable cash flow forecasting is like having a GPS for your business finances, helping you navigate the twists and turns of the financial road ahead. While it can be a challenge, it’s important to know that with the right systems and processes in place, it can be very manageable.

The Business Intel + Strategy team at Roberts + Morrow works with CEOs of SMEs to help manage and optimise cash flow.

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To get in touch with our team, start by emailing us at enquiries@rm.net.au

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