Do you want to know the Six steps to managing your cashflow ?

Cash is the lifeblood of any company. It's what pays for salaries, inventory, and everything else that keeps a business running smoothly Do you know how to manage your cashflow?

This week on the I Hate Numbers podcast, we're going to talk about six steps to managing your cashflow. You'll learn what it means and why it's important for your business. I'll also give you some tips on how to do it without getting overwhelmed!

If you want a successful business, then this is one of the most important things that you need to be doing. It doesn't matter if you have a profit or not - if there isn't any money coming in, then there won't be any money going out either! Managing your cash flow will help keep everything running smoothly so that nothing falls through the cracks and puts stress on other aspects of your company. And don't worry - I've got lots of easy-to-follow advice for making sure that happens!

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Do you want to know more about how people feel about money?

Money is a big deal. It's the lifeblood of your business and it can make or break you. You need to understand what cash flow means, why it matters, and how to manage your finances in order for them not to get out of control. I'm here with six steps that will help you do just that!

There's an opportunity for you to win fifty pounds cash or amazon voucher by completing this quick two minute survey! All we need from you is two minutes of your time so we can better understand the problem and find solutions together. So click below now and complete the survey!

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What next

You’re looking for a way to manage your cashflow? I hope you get some value from this podcast on six steps to manage your cashflow. You are not on your own! Contact us to see where we can help. Our news section, FREE online calculators are there for you. Just click here now to get started!

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Let me share two facts with you. Fact number one, your business does not have to make a profit to survive. Fact number two, if you do not have cash or access to cash resources, your business will not survive. You do not pass-go. You do not collect 200 pounds. The show is over. Close the lights on your way out.

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Hi folks. My name is Mahmood. I'm an accountant of over 26 years in practice helping businesses of all sizes and complexity nationally, domestically, and internationally. In this podcast, the whole purpose of which is to help improve your money mindset, make more profit for your business, save tax, save time, and make sure you and your business work in harmony.

In this podcast, I'm going to share six steps with you on how to manage your business cash flow. Before we get into that, I want to talk to you about what cash is and why it's such a big deal, and also talk to you about the opportunity for you to win 50 pounds in cash or Amazon voucher. Let's crack on with the broadcast. Now,

firstly, what is cash? Well, cash is what you see in your company bank account or what you count in your wallet and your G-pockets. It's physical. It's not quite the same as profit, but cash is what we're focusing on today. Now, why is it such a big deal, why is it so important, and why is it the key to your business survival and your business prosperity?

Well, fundamentally, when you have suppliers who provide you materials, labour, when you buy equipment, when you pay off your loans, cash is what is needed to do that. When you have staff, when you engage freelancers, they don't want to be paid in buttons. They want to be paid in cash. When it comes to paying yourself, when it comes to paying taxes, cash is what is needed.

Cash is needed at every stage of the business cycle. You can have services that you procure, you can have items that you purchase, but at some point the piper plays the tune and you have to pay cash out. Running out of cash, not having access to cash is one of the major reasons why even profitable businesses do not survive.

Now, let's get real. Your two key financial goals in your business are making profits and having good managed cash flow. Profit, ultimately, generates the cash for you. Now, what about those six steps that I mentioned and that opportunity to win 50 pounds? Well, this comes in our first step to managing your cash flow, and it's the first step in effectively anything you do when you run your business, and that's your attitude.

Some might call it mindset, but it's the attitude you have to money and your business. Fundamentally, three things for attitude. Number one, make sure that you remind yourself that you are running a business and not a hobby, which means that you need to take it seriously. You need to invest the energy, the time, and the mindset to connect with your numbers in your business and to take it more seriously.

Now, it could be that you have a phobia. It could be that numbers daunt you. It could be many of those facets, and there's lots of explicable reasons as to why people have poor money attitudes. Those things are fixable. Number two, make sure you do not have a reactive business and you aspire to look ahead.

So, one of the steps I'm going to mention in a moment, is about planning. Planning is a key thing where you look ahead in your business and not to look on a day-by-day, week-by-week basis. That 50 pounds that I mentioned earlier. Check out the link in our show notes and there's an opportunity, a quick two-minute survey

to help me discover more about people's attitudes to money and what we can do to improve it, and as a 50 pound up for grabs for a winner. And the survey finishes at the end of this month of May, so I'd love it if you could take part and have that opportunity not only to learn more about the subject, but also to win that 50 pounds.

What's your second step? Your second step is to manage your profitability in your business. What does that mean? That means whatever your products and services are, you need to make sure you evaluate the costs, you evaluate your current pricing on them, look at your sales, have an understanding where those efficiencies could be made, and where those cost efficiencies can be

gained. Where you can manage your profitability of your mix of products, it gives you greater opportunity to generate better cash flow. Not all products and services will generate the same level of profitability, so it's really key that you get to grips and drill down accordingly. Is your pricing, is your cost structure as it should be?

The second step is profitability. The first was attitude. The third step here is to produce a cash flow forecast, a cash story if you like. Now, this is not a ‘it would be nice to do’. This is an absolutely essential thing for any business, whether it's at the startup phase, whether you're at the growth phase, whether your business is relatively mature.

You must do a cash flow forecast. A cash flow forecast is a reflection of your business story, your business future. It tells you when the cash is likely to arrive, when the cash is likely to leave your business, and what you need by way of cash to support the ongoing operations. Typically, produce your cash flow forecast, your insight into the future over a 12-month cycle.

If you check out the show notes, there's plenty of resources on cash flow management and cash flow forecasting. Use those and produce a cash flow forecast for your business, whatever stage you are at, and whatever size you are. So, that's three things we've talked about: attitude to money and your business, managing your profitability in your business, producing a cash flow forecast.

We've got three more to go. Step number four, credit control. Make sure that you have an effective credit control policy in your business. Do not adopt the ostrich look. So, when you give customers time to pay for your products or services, make sure you've got a good, robust policy of assessing the risk of collecting that money, getting invoices out on time as soon as the work is done, making sure you've got a system for collecting that money from your customers,

adherence to payment terms. It may be that you are looking to deposit for new customers, but keep on top of your credit control. It's absolutely vital. Poor credit control can lead to a disaster. Now, the last two steps, the penultimate step is have a good accounting system. So, running your business, managing your profitability, managing your cash flow.

You need access to real-time numbers, not numbers based off your final accounts, not numbers that you're extracting from a bunch of spreadsheets. Digital is the way to go. The access points, the ease of using digital accounting software is so much easier now compared to a former generation. There is no real reason not to do so. A good accounting system,

a good digital system will help you keep on top of your invoicing, will give you access to numbers in real time. It will give you that vital information that could feed into keeping your cash flow up to date. Now, lastly, have a contingency, that what if. So, when you look into the future, do you have those problematic periods coming up?

Do you have access to overdraft facilities? Do you have access to funding facilities, to loans? Make sure you've got a contingency to back up. Now, all businesses by nature, your business will be spending money today, investing in equipment, investing in staff, investing in marketing, keeping the business going, and there is a time delay between that money going out of your business and the money coming back in.

Long-term, medium-term profitability will be on the agenda, but cash is needed to keep the cycle going and to keep your business continuing. Okay, folks, let's wrap up with our six tips. Let's summarise what they are. Attitude to money in your business. Make sure you're on top of it. Managing your profitability, producing a cash flow forecast,

keeping on top of your credit control, having a good accounting system, and a contingency to back yourself up. Check out our show notes for some links to plenty of resources. If you need help with any of this, by all means, contact us via the website. I'd love it if you could take part in the money survey.

So, lots to digest, lots to think about. Hope you got some value from the podcast. If you liked the podcast, I'd love it if you could subscribe, tell your friends and family, even tell your enemies about it as well. Until all of that, next week, folks, have a fantastic week, keep an eye on your cash, and I'll see you on the other side.

We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.