Managing cash flow – Part 1

Managing Cash-flow – It is all about managing what is coming in and what is going out.

It applies to you, in your personal and business life, gone is the days you just had cash in your wallet to manage.

I had a client where the son had to step in for the father while he was sick. Staff was shouting “pay this”, “pay that” and it was a press of a button and they made the payments.

VAT was due in a few days! when I stepped in, stop!

Steps to managing your cash flow – Know what is coming in and what is going out.

1 – Make a list of all your debit orders and the dates that they get deducted from your bank account.

2 – Make a list of all your regular variable payments that you need to pay, e.g Telkom, Vodacom etc.

3 – Check the dates that they are due on.

4 – If you are taking on new debit orders, ask the supplier what payment dates are available.

5 – The same applies for regular payments, e.g school fees.

Remember as a sole proprietor and small business we don’t receive a salary or a fixed amount on one day.

Now that we have a list with amounts and dates, see a simple schedule is available at resource.

Check the due dates on all. If you are taking on new debit orders ask them what dates are available for payment. Even your regular payments, personal payments e.g school fees.

I had a client who would tell me on which payment run he was going to pay me. Ha? Yes, he set 3 payment runs, a month.
  • The first of the month – was for debit orders from the suppliers that insist your debit order go off on the 1st.
  • The 7th of the month
  • The 15th of the month
So, if I sent my invoice to him on the 5th he would pay it on the 7th, if I sent it on the 8th he would pay it on the 15th. He let his money rest in his account. He had paydays.

If you look at the due dates on Telkom and the City of Cape Town invoice they have a due date., schedule them to one of the above.

Read on next month, Tips to Managing your cashflow – Part 2.

Need assistance with managing your cash flow contact Cherine at The Bookkeeping Company.

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