McLEAN AND CO.
To Lease or Own www.mcleanandco.co.nz/Page21.htm
Financial Management Planning www.mcleanandco.co.nz/Page86.htm
Reasons for Business Failures www.mcleanandco.co.nz/Page34.htm
Is your Activity a Business or Hobby? www.mcleanandco.co.nz/Page115.htm
43 Ideas to Promote your Business www.mcleanandco.co.nz/Page97.htm
THE CASH FLOWING
thriving business is so often a vulnerable business.
The increased business can mean that attention shifts away from
your businessís lifeblood- cashflow.
flow, or working capital as it is called, is the money available to pay for
the day-to-day operation of your business.
Without it your business, no wonder how profitable or successful,
A failure to manage working capital is a major cause of business
failure, so careful management of cash flow is essential.
of these strategies are important to take control of your cash flow and
ensure that your business thrives and prospers:
run out of Cash- running out of cash will
result in business failure.
is King- itís
important to recognize that cash is what keeps your business alive.
Manage it with care and the attention it deserves, its very
unforgiving if you donít.
the Cash Balance right now- even the most intelligent and experienced person
will fail if they are making business decisions using inaccurate or
incomplete cash balances.
Todayís Work Today-
the key to keeping an accurate cash balance in your accounting system
is to do todayís work today.
When you do this, you will have the numbers you need- when you need
you do the Work or You have someone else do it-
The work must be done. You canít ignore it.
You do the work or have someone else do it.
Manage the Bank Balance-
the Bank Balance and the Cash Balance are two different animals. You
have to reconcile your bank balance and allow for unpresented items to
derive your correct position.
what you expect the Cash Balance to be Six Months from now-
this one question will give you a foresight into your future business
Flow Problems donít just happen-
an owner must be able to see a future cash flow problem in time to do
something about, thus the need for future forecasting.
absolutely, positively must have Cash Flow Projections-
Cash Flow Projections are the key to making wise and profitable
∑ Eliminate your Cash Flow Worries so that you are free to do what you do best (taking care of Customers and make more Money).
TO IMPROVE CASH FLOW- CREDITORS
TO IMPROVE CASH FLOW- SUPPLIERS
alternate suppliers to tender.
longer terms from suppliers.
Purchase Orders to reduce discretionary staff spending.
pay early unless big incentives are given
a 30 day Credit Card.
This can add 51 days to terms.
Warning- dangerous to your financial health if misused!!
TO IMPROVE CASH FLOW- STOCK
∑ Identify surplus stock for sale and return
up a just in time Stock Replacement System
a Stock Holding Register.
minimum and maximum levels for each stock line.
TO IMPROVE CASH FLOW- TO KEEP CASH HERE
and sell surplus assets.
sale and lease back of productive assets.
payment to shareholders.
equity in business for cash.
your bank fees. Renegotiate if necessary.
multiple accounts into one.
assets and equipment and retain useful cash.
capital equipment purchases.
electronic banking set up so you can see your cash position when you need
too, not when the bank sends out statements.
surplus cash into high interest Term Deposits or Cash Management Accounts.-
Cash Management Accounts can be re-drawn if the business needs it
a separate account for staff entitlements such as super, holiday pay, long
Treat it as a savings account.
shares in other quality companies with spare cash and keep adding to it over
easily liquidated when you need it.
If we can assist further, please email McLean and Co as follows:
CONTACT McLEAN AND CO. BY EMAIL BY CLICKING ON THIS LINK
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