Search
Close this search box.
Blog » Money Tips » 3 Tips for More Effectively Managing Business Cash Flow

3 Tips for More Effectively Managing Business Cash Flow

cash to credit card flow

When it comes to success as an entrepreneur, effectively managing business cash flow is one of the most important things you can do.

It’s not just about what comes in. And it’s not just about pinching pennies. It doesn’t matter how much is coming in if you mismanage it. If you are trying to grow your business, it’s important to stay on top of cash flow. Here are three tips that can help you with more effectively managing business cash flow:

1. Pay Attention to Where and When Your Money is Coming From

First of all, you need to pay attention to where and when your money is coming in. Often, we just look at the numbers to see how much is coming in. Yes, it’s important to know how much is coming in relative to what’s going out. But that’s not the whole picture.

Managing business cash flow also includes knowing where the money is coming from, and when it arrives. Do you know the sources of your income? Dig into the numbers to get an idea of where the money comes from. This will help you identify the most effective sources of income, and help you see where to more profitably direct your energy.

On top of that, it makes sense to know when you have money coming in. Do you have an idea of what to expect in terms of timing? Look for patterns in the times you are likely to receive revenue and other income. While you can’t predict everything, cash flow management is easier when you have more information.

2. Payment Timing

Once you have an idea of what to expect, and you have a general idea of where your money is coming from and when it’s coming in, you can try to manage your payment timing.

Payment timing is essential to managing business cash flow. If you are given a choice about when to pay a bill, choose a time when you can be reasonably sure you will have the funds.

You should also consider payment timing when billing your clients. One of the best rules of thumb is to try to get people who owe you money to pay as soon as possible. Get part of the payment up front so that you have some cash in hand. Then see about arranging what you owe to others to a time when it’s more convenient for you.

3. Diversify Your Revenue Streams

When managing business cash flow, diversifying your revenue streams is vital. This has been important for my business. Do what you can to make sure that you are ready, just in case one of your sources of revenue dries up. You don’t want to be stuck with all of your eggs in one basket.

You can do this by cultivating different clients, investing in different ventures, and by developing different products. When you have different income streams, you are more likely to stick around. Develop a business model that allows you to try different things so that you aren’t stuck if something doesn’t pan out or if things change.

The better you are at managing business cash flow, the more likely you are to financially thrive as a business.

 

Check out some of our other business tips

About Due’s Editorial Process

We uphold a strict editorial policy that focuses on factual accuracy, relevance, and impartiality. Our content, created by leading finance and industry experts, is reviewed by a team of seasoned editors to ensure compliance with the highest standards in reporting and publishing.

TAGS
Credit Expert
I’m Miranda and I’m a freelance financial journalist and money expert. My specialties are investing, small business/entrepreneurship and personal finance. The journey to business success and financial freedom is best undertaken with fellow travelers.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Categories

Top Trending Posts

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More