pro finance blog
Menu
  • About Me
  • Hire Me
  • Contact Me
  • Submit a Guest Post
    • Privacy Policy
    • Disclaimer
Menu
Small Business

Why Having a Strategy for Managing Cashflow Could Save Your Small Business

Posted on July 5, 2017June 11, 2020 by Tina Roth

Cashflow can be one of the most challenging things in certain lines of business. If you often find yourself having to pay out for things like staff wages, materials, and overheads while waiting for customer invoices to be paid, you will know how much of a strain it can be. In the worst cases, it can leave you having to take money out of your own savings to cover business costs due to cashflow issues, and of course, this isn’t always something you can do.

Small Business

Cashflow Management

Good cashflow management is therefore absolutely crucial to your business, however many business owners think that all this takes is strict invoice payment deadlines and being careful about spending when payments are pending. In reality, most experienced business owners report that even with the best of intentions to keep a handle on the money coming in and out of the business, times of poor cashflow still arise – along with all the stress that comes with it.

In fact, cashflow issues can be a reason why some businesses fold – if they don’t have the cashflow coming in to pay for the things they need to continue providing their products and services, the business can become untenable. This means that a cashflow management approach that will protect your business will need more attention, especially if cashflow is an important factor in keeping your company operational.

How Cashflow Issues Can Arise

There are lots of reasons why you can end up with a bad cashflow situation, but usually it’s due to waiting for invoices to be paid. Some customers may have slow internal processes or simply only pay at the last minute for strategic reasons, and this can cause a lot of frustration. The fewer clients you have, the worse it can be, as you can end up dependent on the payment dates they manage. This means that if you’re a business with a few major clients in which most of your trade is with, you can be most sensitive to cashflow issues.

Invoice Financing

An option that may be available to you to protect yourself from the dangers of negative cashflow is invoice financing. This is where you gain access to some, or all, of the funds you are expecting from open invoices from an invoice financing company, who then receive repayment when the invoice is paid. Of course, companies that offer this do take a fee for the service, but this can often be seen as a reasonable overhead for removing any challenges to your business that cashflow situations can cause.

Cashflow and Growth

Having an invoice financing arrangement in place can also make it easier if you are strategizing to spend money on things that will help your business expand. Knowing that your plans won’t be held up, or even ruined by waiting for payments coming into your business, can allow you to go ahead with confidence.

Cashflow management is crucial to most types of business, so be sure to know what options are available to help you.

Category: Small Business

Leave a Reply Cancel reply

You must be logged in to post a comment.

About Me

finance blogger

The idea of starting a blog has been hitting me for long; I took it seriously after falling into a spiral of debt and recovering from it.

I have been anxious all through the financial difficulties. I see that same anxiety in the eyes of people, whose ill fate has put them at odd with financial repose.

It makes me compassionate. Out of this compassion and goodwill, I started this blog. I wanted to help all those, who are facing financial distress..




  • Stock Market
    Understanding the Gov Tech MarketFebruary 16, 2023
  • Phuket Real Estate
    Why You Should Invest in Phuket Real EstateJanuary 24, 2023
  • Corporate Governance
    Corporate Governance: What Are the 3 Core Principles of Good Corporate Governance?December 17, 2022
  • Successful Retirement
    How To Plan For Successful Retirement At 50: 5 Steps To Get Started OnNovember 4, 2022
  • Online Money Transfer
    Do You Still Transfer Money Internationally With Your Bank? There Are Better Online Solutions For ThatOctober 14, 2022
  • finance
    Important Roles of the Minister of FinanceSeptember 16, 2022
  • Avoid for New Businesses
    5 Forecasting Faux Pas to Avoid for New BusinessesSeptember 16, 2022
  • Affecting Pensions
    How Inflation Is Affecting PensionsSeptember 2, 2022

    ProFinance Blog is dedicated to help people who are struggling with their personal finances. We have learned the lessons first hand and know how real the struggle is. Being compassionate about the personal finances and blogging about is our way to help people know more about different situations and how effectively they can handle it. So take control of your finances now and take actions towards gaining financial freedom and security. Join us in the mission to self-educate, learn and help others by sharing valuable information on finances. Here you will find information, tools and techniques on various aspects of finances and learn how you can use the information and implement it to make your financial life better than ever.Join us in our mission to financial freedom.

    • Stock Market
      Understanding the Gov Tech Market
    • Phuket Real Estate
      Why You Should Invest in Phuket Real Estate
    • Corporate Governance
      Corporate Governance: What Are the 3 Core Principles of Good Corporate Governance?
    © 2023 ProFinance Blog | Powered by Minimalist Blog WordPress Theme