Starting entrepreneur? Ensure a healthy cash flow
A new company is faced with many challenges and expenses. Sufficient income is essential to keep the scales in balance. How do you ensure a healthy cash flow from the start?
Good start, healthy business plan
When setting up your company, you ensure a thorough business plan: an overview of all expected income and expenditure in the first three to five years. You usually prepare it with the help of an accountant and you receive advice during starters’ processes.
Tip: keep in mind that your liability in case of subsequent problems or bankruptcy is assessed on the basis of this business plan. So, spend enough time on it.
Working capital: a healthy buffer
As an entrepreneur you usually invest a lot of your own resources in your company. Much of that start-up capital goes to start-up formalities, another to the initial activities. So, make sure you start generating income as soon as possible so that you can move towards a healthy cash flow.
Short- and long-term bank financing
You cannot finance a lot of expenses yourself. A bank is than a logical partner. With an investment credit you incur major necessary expenses; a mortgage loan is used to buy, build or renovate business space.
A bank also offers short-term solutions: with a cash credit you can cover a liquidity shortage and with fixed advances or ‘straight loans’ you temporarily finance a larger operation.
Balance between income and expenditure
One your business is up and running, it is important that you have sufficient stable income. That is the domain of credit management. Ensure fast invoicing after each job and strictly follow up the payment from your debtors. In the absence of payment, a quick collection is essential to prevent your cash flow from deteriorating.
B2B collection of undisputed invoices without any charges
A lot of invoices are not paid, but are also not disputed by the customer. With the new administrative procedure for the collection of undisputed B2B invoices, payment can be achieved much faster: you get clarity about the acceptance of your unpaid invoice after four hours and the actual collection usually takes place after a month. This way your financial balance remains assured.
Unpaid invoices? Contact us today to boost your cash flow position.