Do you know that some companies went into bankruptcy despite being profitable? Everyone knows that to keep business running smoothly, we need to have enough money to cover expenses. Yet, many SMEs reports that managing cash flow is challenging. Today, we give you a few must-know money management tips and strategies.
1. Manage your receivables
Sales with no collection is worse than no sales! Do you know who owe your money or/and when are they past beyond the due dates. To help you track receivable, invest in an accounting system to track your customers, sales and their corresponding due dates.
Do have a habit to review your accounts receivables ledger and pursue those payments by sending out invoices and late notices to customers.
2. Manage your payables
Do you know the amount of bills you have and their due dates? Do you often have to pay unwanted late fees, added interest or even worse, late penalty fine! Missing bill payments not only results in the above-mentioned unnecessary costs but also sour lender and vendor relationships.
To avoid missed bill payments, have an accounting system to record when payments are due and set reminders or put in place a schedule payment schedule to stay on top of your deadlines.
3. Manage Your Inventory
Do you know how much inventory you have? You may have heard of “Empty shelf don’t sell”. For any business, empty shelves mean lost sales and turning away customers! Conversely, too much inventory, only to collect dust in your storage room are burning cash every day! Thus, it is important that you track your own inventory and define what is the “sweet spot” for your business.
Then, invest in an accounting system that can provide you with the needed Inventory module to track your stock movements and value.
Cash management is of utmost importance to the survival of your company. Ultimately, all sales, service and hard work got to be converted to cash! Having an accounting system and/or outsourcing your accounting to the professional accounting firm is the way to go.
Contact Accounting Consultancy for the best advice and solutions. We have helped many SMEs over the years to reduce costs and improve productivity. As the trusted accounting firm in Singapore, we have a team of dedicated certified Accountants to provide you with professional accounting services.
Accounting Consultancy is a Professional Accounting Firm in Singapore with qualified accountants. Over the years, our focus is to provide Professional, Personalised & Prompt accounting services to local and international clients. As a result, our organization grew rapidly over the years, attaining many awards and certifications.