Money and cash flow management are deemed to be some of the most important aspects of the management of Small Medium Business (SMB). Here are a few tips:
1. Review your books regularly. When you’re running your business, you may not take the time to sit down and look at your financials. But you can’t manage your money without having the facts. At least once a month, preferably once a week, look at your figures: accounts payable and receivable, expenses, cash flow, etc.
2. Send them your bill! I’m always surprised by how many businesspeople, especially consultants and professional service providers, delay sending out their invoices. You may feel uncomfortable asking someone for money, afraid of being challenged on how much you’ve billed, or just too busy working. But the longer you wait to send out your invoices, the greater the chance you won’t get paid.
3. Watch your inventory. If you produce goods, you’ll always be tempted to produce more because you get savings based on volume. But inventory can go “bad,” become out-dated, unsaleable, time- or weather-worn.
Inventory doesn’t just apply to finished goods for resale. You may have “inventory” in the form of marketing materials. Keep an eye on your actual use and make your purchases not only on the basis of price but whether you can get small quantities only when you actually need them.
4. Manage your growth. You want your business to get bigger, but if you grow too fast you may not be able to sustain it. Growth costs money; you incur many expenses before you see additional income. Plan your growth so you have the financial resources to pay for it.
5. Save. Every business has income fluctuations. The best way to have cash when you need it is to put some away when you’ve got it.