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How to stay on top of cashflow

Running a small business can be unpredictable. It’s possible to be flush one day and struggling to pay suppliers the next - often through no fault of your own. The ups and downs of your available funds are known as cashflow, and ensuring it remains positive rather than negative is one of the most challenging aspects of running a small business.

This article looks at four ways to improve your cashflow, plus some suggestions for how Great Southern Bank can help.

Four tips to improve your cashflow

Keep an eye on your spending

Minimising essential expenses and eliminating unnecessary ones is central to the success of any business. But you knew that already.

One thing you can do in this area to address cashflow specifically is to think of cash and credit expenses differently. While both count as outgoings, buying stock on credit, for example, means your cashflow won’t be impacted until payment is due.

Don’t try to pay off all your debts at once

Sounds counterintuitive, right? But paying off all your debts in one go can leave you short on available funds, which, as we’ve seen, can lead to negative cashflow. Expenses you hadn’t anticipated can crop up at any time. Similarly, your business’s income might slow down for reasons beyond your control.

Holding on to cash you don’t need to spend immediately (such as bills with extended payment terms) can leave you with more options if and when the unexpected strikes.

In fact, it’s a good idea to open a separate business savings account for any such spare funds. Not only will you be keeping them in a safe place, you’ll be earning interest too.

Forecast, forecast, forecast

Conducting regular cashflow forecasts is essential. While doing so won’t guarantee yours remains positive at all times , you will at least get advance warning of periods of negative cashflow coming down the track. Forewarned is forearmed, as they say.

Credit is not your enemy

Most of us are brought up to be wary of credit, and for good reason. But while that’s sound advice for individuals, things are slightly different when it comes to businesses.

As we’ve already seen, there will inevitably be times when you don’t have the funds available to cover all your business expenses. In such instances, using a business loan or overdraft to bridge the gap could be a perfectly valid and responsible thing to do.

We’re here to help

Great Southern Bank Business+ Unsecured Loan and Business+ Unsecured Overdraft have been created with small businesses in mind. Here’s a quick look at some of the features which could help you stay on top of your cashflow.

Business+ Unsecured Loan

  • Competitive interest rate
  • Access up to $50,000 without using your assets as security
  • Fixed interest rate means your repayments don’t change over the life of the loan

Business+ Unsecured Overdraft

  • Competitive interest rate
  • Interest is charged on your balance, not your total limit
  • Access up to $50,000 without using your assets as security

You can apply for either in minutes with Great Southern Bank Business+. Get started today and manage your business’s finances from the convenience of your phone.

Also, don’t forget to check out our Business Hub. You’ll find heaps of free resources and plenty of helpful information to keep your business humming.

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Cashflow Forecasting

Cashflow forecasting is crucial for small business to get right. Our cashflow forecast template will help you identify any issues in advance.

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General Advice Warning

The information provided here is general advice only. We haven’t considered your financial circumstances, needs or objectives. You should ask your Tax Advisor or Accountant before you decide about products mentioned in this article. All care has been taken to prepare this content, but no warranty is given for the information provided. Neither Great Southern Bank or its related entities, employees or agents are liable for the decisions or actions you take because of this information.