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Cash flow management tools to add to your small business

Statistics indicate more than 60% of small businesses in Australia stop operating within the first three years, and many of these failures are due to poor management and inadequate cash flow.

If you’re starting a new business, or growing your existing company, it’s so important to stay on top of the numbers and have your eye on the 12 months ahead. These days, there are plenty of tools to keep you – and the financial health of your business – on track. Here are a few to get you started:

Cash flow management forecast tool

Tracking and forecasting cash flow should be a priority for any business owner, whether you’re in hospitality, retail, professional services, construction or beyond.

Managing cash flow allows you to estimate how much money will be available to your business going forward and work out how much money your business needs to cover debts. It can also help you spot trends and tackle any cash flow issues before they become a major crisis.

Our cash flow template is a quick and easy solution to your cash flow forecasting needs, featuring:

  • Instant calculations.
  • Multiple payment types.
  • Coloured alerts for when cash balances fall below a minimum threshold.
  • Monthly insights on your incomings and outgoings.
  • A ‘living’ business plan that changes as you grow.

Get our cash flow forecast tool here.

Profit and loss projection tool

How much money will your business bring in over the next 12 months? What big (and small) expenses are you facing? Will you be investing in new equipment or staff?

Our profit and loss projection tool helps you accurately forecast the year ahead by:

  • Helping you monitor current activity with a few quick expense calculations for the month.
  • Developing projections, sales targets and pricing for goods and services into the future.
  • Using the results to tweak your business model for even greater financial success.

Your existing accounting software

Your existing accounting software, and add-ons or integrations, likely offer insights and tools to help you manage cash flow. If you’re only using your software to automate invoicing and record expenses, take another look at the available data, reports and tools that can help you go beyond the basics.

Most accounting software platforms provide free tutorials to help you understand and take advantage of all of the features available. A one-off session with an accountant or bookkeeper can also get you set up with advanced accounting software options.

Software tools such as Simply Cashflow, Futrli and Float are also options that integrate with Xero, for example, and provide cash flow forecasting insights.

Research indicates only 53% of Australian small businesses are cash flow positive, and one of the main reasons businesses seek finance is to maintain short-term cash flow.

Low-tech cash flow management tips

While tech tools are great, it’s important not to overlook the basics of cash flow management. Tips to stay cash flow positive include:

  • Keep personal and business accounts separate.
  • Create a business budget.
  • Spend wisely.
  • Consider leasing instead of buying.
  • Stay on top of stock management.
  • Build a cash reserve.
  • Keep the books up to date and invoice promptly.
  • Have clear payment terms and conditions.
  • Be consistent with marketing efforts.
  • If you get stuck, ask for help – an accountant can help you understand how cash flow is impacting your business. Cash flow loans can also get you through a rough patch or help you enjoy time off over summer without worries.

Contact Prospa to find out how a small business loan can help you manage your cash flow.

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The information in this post is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

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