how to manage cash flow

Our Top Tips to Manage Cash Flow

Cash flow is the key to any successful business. Being able to plan ahead and spot any cash fluctuations in advance will ultimately help you achieve your long-term goals. With over 50% of UK businesses cash flow negative last year, we know getting to grips with cash flow can be a big problem. So, here are our top tips to manage cash flow, from forecasting software to financing options, so you can rest easy knowing there’s money in the bank, and spend more time growing your business!

Make sure your bookkeeping is up to date. 

This might sound trivial, but don’t underestimate the power of good bookkeeping! Any cash flow forecasts you do will be based on this information, so it’s super important to get it right from the start. The more information you have, the more accurate it will be to look forward. And if your bookkeeping is incorrect, then your future projections won’t be accurate either! Here are our tips on how to be a badass bookkeeper. 

Use cash flow forecasting software to do the heavy lifting.

There’s no need to do manual forecasts when there’s some really intuitive software that will do it for you! There are a small number of apps in the market that help you proactively manage your cash flow, making your life easier. They’ll plug into your accounting solution, so you can spend less time reconciling information and more time growing your business. Our favourites are Float and Spotlight Reporting. 

Float is short-term cash flow forecasting software providing highly detailed daily, weekly and monthly predictions.

Spotlight Reporting is integrated reporting and forecasting software accountants use, that offers high-level strategic forecasts of up to three years.

With Float and Spotlight’s scenario planning tools, you can estimate the impact of any ‘what if?’ situation, giving you the confidence to make the right decisions for your business. 

The Ashton McGill Forecast Canvas Guide

Want something quick and straight forward before you try cash flow forecasting software? Our Forecast Canvas makes managing cash flow accessible to business owners on a basic level. It’s a basic tool which allows you to map out your future projections, helping you budget, plan and meet targets head-on.

Download your free copy of our canvas here and our guide on how to use it.

Automate the invoicing process.

Getting paid on time, every time is one of the best ways to improve your cash flow. And the sooner you send your customers an invoice, the sooner you’ll get paid. 

Digital payment services like GoCardless collect recurring payments from customers via direct debit, giving you more stable cash flow.

With PayPal for business, you can send professional, customised online invoices and payment reminders, with funds reaching your account in seconds. 

With these handy apps in place, you can rest easy knowing you’ll get paid on time. You’ll never have to chase a late payment again either, which means happy days for your cash flow!

Have a forecasting action plan in place.

Once you’ve nailed your bookkeeping, cash flow forecasting and invoicing, you’ll need a failsafe action plan for securing funds. 

Forecasting software like Float and Spotlight Reporting will identify when your cash flow is expected to dip. The next step is making sure you get the right funding in place when you need it. It’s important to consider the different options out there and which one is best suited for you and your business. The lending landscape has changed massively over the past few years, with many alternative finance options now available, meaning you don’t have to go to your traditional bank anymore. Here we’ll run you through some alternative financing routes so you can easily get your hands on capital.

Satago is an all-in-one cash flow solution with invoice financing, credit control and risk insight. Satago’s invoice financing feature advances payments to business owners to minimise cash flow gaps. Just register and connect with Satago, select the invoices you want to fund, sign Satago’s finance agreement and you’ll receive funds to your bank account that same day. Your customers then pay Satago by the due date, and Satago will send you the payment, minus their fee. 

With Capitalise, a good accountant can help you compare business loans from over a hundred lenders. Capitalise makes it easy to find, compare and select lenders who are most likely to give you an offer. Once you’ve identified any gaps in your cash flow, you can then take action to make sure you stay in the green. 

Both of these platforms are really great ways of helping to improve your cash flow. As well as invoice financing, there are a host of other options for raising finance such as crowdfunding and peer to peer business lending, as well as traditional finance options from the bank. Whichever route you choose, just remember to keep doing cash flow forecasts even after you get funding, because you will ultimately have some money to pay back. 

What next?

Need more advice about cash flow or raising finance? We’re here to help! 

We help our clients manage their cash flow with regular cash flow forecasts. We can also advise on different financing options, helping you secure the right one for your business. 

You can get in touch with us here

If you’re an AM client, call us or ping us a message on Slack and we’ll get back to you that same day.