Business Daily Media

Top Mistakes Small Businesses Make When Managing Their Cash Flow

  • Written by Angus Sedgwick

It’s a tough time for SME’s at the moment. Rising overheads, supply chain issues, high staff turnover and an increase to the minimum wage – it’s no wonder many are struggling with the day to day running costs. Here at business cash flow finance company OptiPay, we’ve had a two-fold increase in inquiries as a lot of businesses start to realise they have a cash flow problem and they look to solutions.  

Whilst invoice financing can be a huge help to many businesses it’s important to realise where cash flow issues stem from and the most common mistakes SME’s make when managing it.

  1. Delayed Payments 

It’s a simple fact of life that customers fail to pay on time. More than $76billion of outstanding invoices are weighing on the shoulders of Australian SME’s. Delays in payments make it harder for you as a business owner to prepare for an accurate cash flow forecast. How can you plan an expense or ongoing payment when you don’t know when your next incoming payment is coming in? Cash flow forecasting is vitally important as it helps make the important decisions that keeps the business going in the right direction.

  1. Fast Expansion 

This is one of the most common causes for Australian SME’s cash flow complications - the temptation to move too quickly and grow too fast. Without enough cash flow, businesses lose the ability to control their working capital requirements. Growth and progression is vital for every business but make sure your cash flow is up to the task before you expand.

  1. Poor Inventory Management 

This is another common cause of cash flow problems, where excess stock is lying around leaving assets that tie up valuable cash for months on end. In addition to holding back cash which you could be using to fund your business, keeping too much stock means you run the danger of it becoming outdated and obsolete, which could land you in further trouble.

  1. No Sales Leads 

Poor cash flow can also be the result of low sales and a lack of new leads. It may be a seasonal demand issue, or an overall slowdown of business but many organisations can hit a sales roadblock from time to time. Freshening your marketing campaigns can be one way of getting around this problem or renewing your focus on digital marketing and new sales people.  

If you find yourself experiencing cash flow problems the most important thing is that you address them quickly and it would be wise to engage the services of a financier like OptiPay to discuss the solutions available to you to provide your business with the extra cash it needs to keep up with its growth and working capital requirements. 

About Angus Sedgwick 

Angus Sedgwick is the CEO of OptiPay, formerly TIM Finance, which provides Australian SMB businesses cash flow they need to grow. Funding solutions include invoice finance, trade finance inventory finance and lines of credit.  Their range of fast, flexible and affordable financing solutions help businesses solve their cash flow challenges, without the need for property security. Find out more at https://optipay.com.au

 

Business Reports

Revolut launches educational courses on cryptocurrency in Australia to advance financial literacy

Revolut, the global financial superapp with more than 20 million customers worldwide, is taking another step forward towards its mission of bringing customers the best financial products and services to manage their money. ...

How to Ask for a Promotion or a Pay Rise

We’ve all been there – you’ve been waiting for the promotion that seems imminent, but then it never seems to come. It's hard to know how to ask for a promotion or a pay rise. Do you just go in and ask? Do you wait for yo...

Trump properties aren't the only ones to see wild valuations – putting a price on real estate isn't straightforward

40 Wall Street is one of the Trump Organization properties included in the lawsuit.Roy Rochlin/Getty ImagesOn the lower tip of Manhattan there is a prime piece of real estate, the price of which is somewhat up for debate. To the o...

Why shortages remain common 2½ years into the pandemic

A frequent sight during the pandemic.Diana Haronis/MomentShortages of basic goods still plague the U.S. economy – 2½ years after the pandemic’s onset turned global supply chains upside down.Want a new car? You m...

Liked and shared: How social media can elevate your customer experience

Don’t neglect this golden opportunity to connect with customers and win mind and market share. Is social media central to your business development strategy, or something you squeeze into your schedule, as and when? For man...

Optus | Commentary on governance, policy and procedure - Rackspace Technology

“This incident is all about governance, policy and procedure. You can have the best security solutions in place, but you are vulnerable to breaches without the right policies and procedures overlaid with effective governance...

Web Busters - Break into local search

WebBusters.com.au