How to Boost Your Startup's Cash Flow?
Cash flow is the motor of your business whether it is small or big. Keeping track of it can be a challenge even for large corporates, not to mention a young startup. You know it if you have ever struggled to cover your expenses at the end of the month. Your goal is always to have a positive cash flow and of course, ensure that more money is flowing in than out to keep your business running and even grow it and be able to reinvest.
In order to improve your cash flow, you need to manage the money of your business well, as most of the time, it is not enough to have profit, as you can still have a problem with paying your bills.
So how you can improve the procedures and boost your cash flow?
1. Cash injection without investor
If your startup is in a really early stage and you already have customers, the ideal way that you have the funding from them. Like this, you do not have to report to anyone and you will not be responsible for anyone just yourself. Unfortunately, in most cases even if it works for a while it will not allow you to grow your business. Therefore, you can apply for a government grant or accelerator program. These will provide you with some funds, other benefits, and guidance on how to develop further, most of the time you can also build a relationship with investors, which leads to our next point.
2. Find a venture capitalist
You can find angel or seed investors yourself who can inject cash in your business for a small share but if you have already generated a revenue, have a value to your customers then you can start to really drive growth with a venture capitalist firm. If you can find a good one, then it will provide you with not only cash for your business but build a suitable strategy for you. APX is more than a VC, they have a tailormade program that fits your needs and they will assist you to match with investors through their network that will help shape your startup and boost your cash flow.
3. Monitor and reduce your expenses
Once your business is running smoothly, you need to start thinking about reducing costs. To have a positive cash flow, the most important thing is to keep your books organized and understand and follow all your invoices and expenses. If you do not have a clear overview you most likely will spend more than it is needed and if you are not organized you can get lost with the tiring expense report procedures when it could be easily simplified. With the right expense management software, you can easily monitor your costs and you will not get lost with the spreadsheets or the tones of papers filed. With Haslle you can manage all the SaaS subscriptions and you can recognize which are the non-essential ones, cancel them easily and save money. You can try it for free by clicking here.
4. Track your invoices
The same applies to your account receivables. If you cannot track your invoices, you cannot remind your clients to pay their bills and you will lose income. You can collect your paper invoices in files and set up reminders to inform your clients about the due date of the payment. This can work, although it is quite a time consuming and it is very easy to lose a paper or overlook an invoice with this method. Therefore if you do not have yet it is vital to have any accounting software which allows you to create pdf invoice, easily overview them and even send them out to your clients automatically and remind them if necessary. With this method, cash collection will be effortless.
5. Know your costs in advance
If you know your expenses in advance not just at the end of the month, you can avoid surprises and you can calculate your cash flow without any difficulty. But how can you know in advance all your costs? Well, your utility bills like electricity and water are more or less the same every month such as the cost of the rent. What about the other expenses like office supplies, subscriptions, business lunches, and travels? With a virtual or pre-loaded credit card, you can control the spendings of your employees, set limits for all members in all categories. This helps not only with avoiding overspendings but if you understand all the costs in every category then you will be able to reduce your total tax bill as well.
6. Pay faster - Be in real-time
It happens with everyone sometimes that we pay later our invoices than the due date. But it is fine if it is not so frequent. In case it happens all the time that can cause trouble with your cash flow. Late payments can generate interests to be paid which not just extra cost for nothing in return but can totally damage your cash flow calculations and you can easily get a negative result. Not to mention that maybe the vendor will not trust you anymore and cancel your subscriptions or agreement due to the late payment. Therefore, it is vital to approve and pay your invoices as soon as possible. How can you make sure that it is quick and simple? An expense report tool like Haslle makes payment procedures so easy that you will never pay an invoice late again. Just a couple of clicks on your laptop or touches on your phone and the problem is solved.
The solution is to use the right tools, so your finger remains on the pulse of your incomes and expenses, you will not overlook any cost and you will never forget about an invoice which should be paid by your client.
All you need is good accounting software and a great expense management tool and your cash flow calculations will be computable and effortless.
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