You use your working capital to keep your business running smoothly for more detail shlomo rechnitz. When your business grows, you will notice that there is more and more money in stocks or that you are waiting for the money. Money that you cannot use to invest in growth. It is therefore important to make the best possible use of your working capital.
Improve your working capital
Working capital is the capital you use to meet your day-to-day financial obligations. For many entrepreneurs it is a challenge to find the right balance in how much working capital you have. Having a lot of working capital does not immediately mean that your company is financially healthy. With a working capital calculation you can see the relationship between your capital and the bills to be paid. Is your working capital out of balance? Then try:
Invoice on time
Avoid being unable to make payments because you are waiting for payments that have yet to come in.
Check the creditworthiness of new customers
Reduce the risk that an unexpected bankruptcy or defaulters will have an impact on your working capital.
Work with multiple suppliers
This makes you less vulnerable and more sure of the continuity of your business.
Organize your stock smartly
With smart stock management you prevent storage costs, ensure more turnover, wider margins and satisfied customers. If you know how to manage your stock properly, this will contribute to the success of your company.
See Also: 3 ways to stay one step ahead
Checklist for smart inventory management
- Track your stock
- Categorize your stock data for a better overview
- Keep an iron supply
- Make a weekly report
- Respond to seasons, trends and developments
- Map out your suppliers properly
Want to read more about smartly organizing your stock? Check out this blog .
Automate debt management
More customers, more assignments, but unfortunately not immediately paid more. Collecting money that you have worked hard for proves to be a challenge in itself. Many outstanding invoices lead to more working capital and less money in the cash register. A shame, because that way you miss out on income. The follow-up of invoices takes time and it pays to arrange your debtor management tightly. If your customers pay faster, your cash flow remains in order and you create room for growth.
When do you know if automating your debtor management is something for you?
• Customer base is growing rapidly
• You spend a lot of time following up on invoices
• Average payment term of your customers is increasing
• Communication about invoices to customers is inconsistent and creates noise
• Regularly have insufficient liquid assets to keep your business running keep
• You are looking for real-time financing that grows with your company
Maintain cash flow
Receipts, invoices and file folders lying around: the faster your company grows, the more important it is to keep a close eye on your cash flow. Are you not ready to automate your debtor management? The tips below will help you maintain your cash flow.
Monitor your business account
daily Checking your company’s expenses and income on a daily basis helps you to see what your most important expenses and cost items are for your company.
More insight with a monthly financial report
Is your company still on track? Are you achieving your goals or achieving the growth you envisioned? Your finances are a source of information. Analyze the most important figures every month, so you can see more quickly where you should focus your attention.
Consider a bookkeeper
Tight bookkeeping takes time and sometimes as an entrepreneur there seem to be too few hours in the day. If bookkeeping takes up too much time and energy, consider outsourcing it to an accountant or financial advisor.