managing cash flow

Managing Cash Flow: The Need To Know

As a bookkeeper, the team at Pebbles Bookkeeping is much more than a body to simply compile your books. We are a consultative body that wants to help your business succeed, and we do that by looking at various ways your company can do things better and become better organised. One such way that we work with clients is by helping them to get a better foothold on managing cash flow, something that is crucial for small businesses wanting to grow in the new year.

Sending invoices promptly is pivotal to good cash flow management, as soon as a product or service is delivered an invoice should be sent. This helps to develop a habit of sending invoices for payment immediately and getting paid quicker, helping your cash flow to remain healthy.

Here are some key rules you should implement to collect your revenue promptly.

Forget Being Lenient

Small businesses thrive on their customers paying them on time with no delays. When a small business is too lenient it starts to snowball into a cash flow nightmare. Being lenient once leads to a feeling that it can be expected from you in future.

If you constantly bend over backwards to give your customers a break on late payments, it is safe to say that the advantage will be taken in due time. When business is slow, it can be tempting to give your customers a few extra days to make their payments. However, the longer you give them, the less likely they will pay you on time moving forwards. Think about whether it will cause a ripple effect on on-time payments before you decide to be lenient with your customers.

Make Accounting Simple

Cash flow problems mostly get traced back to weaknesses in your accounting process. If the system you are using is too complex to manage your accounts then it can quickly become a liability.

Streamlining the method of how you record your transactions is essential, as is the system for extracting this information. At the end of the day, the more time you have to spend recording and filing your transactions, the more your business is missing your expertise to make it grow in size. Messy accounting leads to all kinds of problems, including late payments and late bills – all of which greatly affect your cash flow.

Learn to Separate Business and Personal

A true headache for small business owners is not separating personal and business finances. When you are a small business owner or freelancer, you may need to use some business cash to make personal purchases,

If you run a small business, you are expected to take both a personal and business approach to managing your finances. You should be setting up a personal account and drawing from that when you need to.

Keep Books Updated

The crucial step is ensuring that your books are constantly updated. This is a crucial piece for managing cash flow. Maintaining clear records means you can easily identify when the business is low on cash and when you should be extracting funds.

Having your books up to date helps avoid cash flow errors which are detrimental to your business. This is where bookkeeping services in Manchester come in handy, as they are experts in keeping your books healthy and in line, giving your the peace of mind that your business is running how it needs to be.

Contact the team at Pebbles Bookkeeping services today to help your business get to where it needs to be.

Don't just take our word for it...

Steve Tanswell, Manchester Facades

I changed book-keepers around a year ago because of a disagreement.  I employed Diane of Pebbles and having been with the same firm for 10 years, I was amazed by how easy working with Diane was.  Not only did the change save me money but also saved me time.  Utilising new technologies (to me) have massively improved the amount of money I can claim back in VAT and has made the whole process speedier and well as easier.  Even when Diane is chasing me for information she does in a friendly professional manner.  I’m thrilled to be working with her and would recommend her to anyone.

Lisa Heggie, The Gunnery

A massive thank you to Diane at Pebbles Bookkeeping & HR. You took the huge stress away from where do I start, with employee policies etc. You have created us a great, informative employee handbook, covering all necessary policies and risk assessments in a matter of no time and from the other side of the world too. I will definitely be in touch for any future help our company needs.

James Balderstone, Lucid Networks

Pebbles Bookkeeping took over our bookkeeping when a full-time member of staff left the business.  Our accounts are relatively complex for a business our size because of the number of different suppliers and products we deal with, but Pebbles were able to get quickly up to speed.  We have significantly reduced our costs spent on bookkeeping activity as a result. They have also helped us move to a new accounting system (Xero), which we are already seeing the benefit of, and we’re looking forward to working with Pebbles in the future to automate more of our back-office processes.

Sarah Rekia, Site Welfare

“In bringing Pebbles onboard, it has made me wonder why we decided to try and do our own bookkeeping at all. Pebbles came in and sorted 18 months worth of mess we had unwittingly created, and we cannot be more grateful. I wish I had been told about them years ago and I hope every business out there struggling would give them a call to fully see the benefits they are missing out on.”

Robert Flinn, Director, The Drawing Room

“Pebbles have provided professional and personal approach to all our accounts needs from processing invoices to management accounts. Based in-house they have become a valuable asset to the business and have given us a more strategic and analytical approach to our finances.”