Effective ways to manage the cashflow of your business

Cash is a fundamental element of the management of a business, it is the financial pillar that keeps it in balance at the risk of seeing it languish under the weight of bankruptcy.

It deserves to be managed with attention and a lot of professionalism. How to get there? Here are some tips for managing the cash flow of your business.

What is cash and why manage it?

It is the capital available to a company to use for its needs. Cash allows the company to use its financial resources, but it often happens that some companies go through difficulties that do not allow them to have sufficient financial resources. In this case, the company is unable to finance some of its investments which can have serious incidents on it. This lack of availability can force it to close its doors, hence the need to manage cash well.

Good cash management enables the company to avoid cases of default and save money, like services such as pay calculator take home can serve you well for manages your cash flow. It also allows the company to grow the surplus through long-term investment.

How to manage the cash flow of your company?

Since the company’s survival depends on its cash flow, here are some tips that will help you manage it well.

Negotiate bank loans

Certainly, these rates and interest rates can weigh on the company, but it is always good to start an activity by using a bank for a loan to finance equipment, premises, stocks. To qualify for this credit, you must be a competent entrepreneur, stand up to the competition and have a viable business.

Using an indicator, build your cash flow

Enter your opening balance and any financial movements you make monthly. You will have the opportunity to appreciate, to comb through your cash, and even to anticipate some problems. Similarly, it is important to keep track of incoming and outgoing payments made during the month.

Maintain good relationships (trust) with your customers and suppliers

This in order to bring more money into your coffers . Offer discounts to customers who pay their bills instantly and request an extension within the timeframe for paying your bills to your suppliers . Once this period has been granted, pay cash and meet immediately. Likewise, do not be afraid to be hard on bad payers when it comes to recovering your debts.

Make your operations simple by avoiding enough waste

It’s a good idea to increase production and make your business profitable, but watch out for overproduction, bottlenecks and other waste that can lead you to bankruptcy. Have your employees participate in the growth of your business. 

Finally, finding the right balance to manage your business cash flow is a top priority for longevity and success.

Aston Martin ‘on knife-edge’ after crashing to £79m loss

The luxury carmaker blamed falling sales in Britain and Europe, as well as global “macroeconomic uncertainty”, for the poor performance, which sent its shares to a new low.

They closed at 498p, down 12 per cent and little more than a quarter of their £19 float price last October, continuing a woeful performance that has marked one of the worst initial public offerings of recent times. About 1,000 employees of the company that bought shares in the listing are among those nursing heavy losses.

Aston Martin sought to play down speculation that it could be forced to tap shareholders for more cash, suggesting that it would turn to debt markets if needed.

Max Warburton, an analyst at Bernstein, said that the company was “on a financial knife-edge” with “very, very little room for error or further external pressures”. He suggested that it consider suspending executive pay.

Aston Martin is one of the best-known names in British car manufacturing, thanks in no small part to its cars featuring in the James Bond film franchise. It has gone bust seven times in its 106-year history.

Andy Palmer, 56, chief executive, has been seeking to turn around its fortunes with plans to expand its range, including its first sports utility vehicle, the DBX, (pictured above) due to be launched next year.

However, the company has been dogged by doubts over its growth plans since its listing and last week it stunned the stock market by warning that it expected to sell between 6,300 and 6,500 cars to dealers this year, compared with the 6,441 it delivered last year and the 7,200 to 7,400 it had forecast when it was floated. It also warned that profit margins would fall from a forecast 13 per cent to 8 per cent.

Yesterday it reported a £79 million pre-tax loss for the first six months, down from £21 million profit in the same period a year earlier, as revenues fell by 4 per cent to £407 million.

“We are disappointed that our projections for wholesales have fallen short of our original targets, impacted by weakness in two of our key markets as well as continued macroeconomic uncertainty,” Mr Palmer said.

Mr Warburton said that management needed to “hope and pray the DBX can launch bang on time, and save the situation” and in the meantime the company should aggressively cut back costs, including potentially “suspending the top guys’ compensation for a period”.

He said the results showed that Aston Martin had burnt through cash more quickly than expected and that the position was “not comfortable”. Management appeared to be “ruling out an equity-raise”, but raising debt was likely to be announced soon and would be expensive, but was “somewhere between prudent and essential”.

Mark Wilson, 45, chief financial officer, said: “If we require additional financing from sources with which we are familiar and, in particular, in the debt markets to maintain that capacity, then, that’s what we’ll go out and do.” He added that Aston Martin had more cash than a year ago.

Government gives electric car charging a cash boost

The government is pumping nearly £40m into improving the infrastructure for electric vehicles despite a sharp drop in hybrid car sales.

The Department for Transport will invest in UK engineering to “transform” the network of electric charge points.

Wireless charging and “pop-up” pavement technology are among the investments being made.

Sales of plug-in hybrid vehicles slumped by 50.4% in June after the government scrapped a £2,500 grant.

But the DfT said it was “focusing on the cleanest, zero emission models”.

New UK car registrations for battery electric cars rose by 61.7% to 2,461 in June compared with the same month last year, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

However, the drop in demand for plug-in hybrid cars, which fell from sales of 4,571 vehicles last June to 2,268 vehicles last month, meant that overall the alternatively fuelled vehicle sector shrank for the first time since April 2017.

A DfT spokeswoman said: “The plug-in car grant has supported the purchase of 180,000 new cars with over £700m, including 100,000 plug-in hybrids.”

As well as scrapping the grant for plug-in hybrid models last year, the government also reduced the subsidy for pure electric cars from £4,500 to £3,500.

It also announced last year that it would end the sale of all new conventional petrol and diesel cars and vans by 2040.

New projects

Nevertheless, the government is now investing £37m in a number of projects to make it easier for electric car owners to charge up their vehicles.

The government’s new investment marks the first anniversary of the launch of the government’s Road to Zero strategy, which wants “almost every car and van” in the UK to be zero emission by 2050.

It has handed £2.3m to a company called Char.gy, which is developing ways to deploy wireless charging technology on residential streets which would remove the need for trailing cables and additional infrastructure.

Urban Foresight has been awarded £3m to roll out “pop-up” chargers which are built into the pavement, which are designed to help drivers without access to off-street parking.

At present, the UK has a network of more than 24,000 public charging connectors in nearly 9,000 locations, according to figures from the Department for Transport.

Jaguar Land Rover recently announced that it would invest millions of pounds in the UK to build a range of electric cars at its Castle Bromwich plant in Birmingham.

However, its chief executive Professor Ralph Speth criticised the number of charging points for electric cars in the UK.

“The current charging infrastructure is not really sufficient to cover the country, nor the hotspots of the cities. The government has to govern the process,”.