Cash Flow Management

5 tips to save on costs in your business

How do you increase your bottom line? There are two options - increase prices or save costs. These five easy tips will help you cut down on some costs in your business. Be informed of your options, account for all costs, shop around for competitive rates, ensure all electronic payments are streamlined, and make use of platforms that can minimise costs to your business.

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Basic accounting terms and concepts

While you may find the bookkeeping and financial admin side of your business the most daunting, understanding a few basic concepts will help you understand what your accountant is trying to tell you. It's important to have some basic knowledge so that it's harder for someone to pull the wool over your eyes. This article aims to provide you with that knowledge by explaining and providing examples of common accounting concepts.

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Being smart about saving for your business

Every business is designed to earn money: for profit and survival. By definition, it’s an attempt to obtain compensation for services so that we can continue or begin living comfortably. But sometimes we need to find a way to make money quickly to help the business survive: anything can happen and that means being prepared. So with that in mind, we should consider interventions that can help us succeed through a difficult patch.

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Bookkeeping and record keeping basics

Proper bookkeeping is important to sustaining and expanding a business. Without it, you run the risk of hitting cash flow crunches, wasting money, and missing out on opportunities to expand. When you are devising or revising your bookkeeping routine, remember that the purpose of bookkeeping is to help you manage your business and to enable tax agencies to evaluate your business activity. As long as your bookkeeping achieves both of these objectives, it can – and should – be as simple as possible.

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Cash flow budget template

The cash flow budget template is used to project your business's cash inflows and outflows over a six-month period of time. It has many important uses. It can predict the ability of your business to create the cash necessary for expansion or to support you. It can project your business's cash inflows and outflows and predict your business's cash flow gaps – periods when cash outflows exceed cash inflows. It can also be used to prepare a formal cash flow budget for your lender to help assure the lender that you will have the cash available to pay back the loan.

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Cash flow sensitivity analysis template

This template is set up to be used for forecasting changes in your receipts and disbursements and the effects the changes will have on your cash requirements of your start-up business. This template will show you what will happen to your cash flow when your forecast is off by 5 percent. We've formatted the template and put in most of the inflows (income) and outflows (disbursements) categories for you. All you have to do is put in your numbers and print it.

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Customer statement of account

Do you extend credit to your customers? If you do, two things are essential to maintaining control of your receivables. First, you need to maintain an accurate accounts receivable ledger for each customer – in other words, an up-to-date record of each customer's charges, payments and balance due. Secondly, you also need to be able to send an accurate monthly statement to every customer who owes you money. To help you accomplish both, we have designed a template that combines the accounts receivable ledger and customer statement of account.

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Example of a tax invoice

In order to comply with VAT regulations, for any sale of more than R50, you have to issue a tax invoice, with the word "tax invoice" printed on it. This is the most important document in the VAT system. The VAT Act prescribes that a tax invoice must contain certain details about the taxable supply as well as the parties to the transaction. This includes the value of the goods/services excluding VAT, and the VAT amount (calculated at 14% of the above amount), among others.

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FindanAccountant.co.za

Finding and choosing the right accountant for your business can mean the difference between success and failure. All accountants are not created equal. You need the right match for your exact needs. Unfortunately, once you've selected an accountant, it's often a hassle to switch due to the detailed knowledge that person gains of your business. Therefore it pays, when selecting an accountant, to 'get it right the first time'.

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finfind

Access to finance is one of the biggest obstacles to the survival and growth of startup, small and medium businesses. Finfind has been specifically developed to address this challenge for this vital sector. Finfind is an innovative, online platform that automatically matches the seekers of business finance with appropriate funders from a comprehensive, up-to-date database of more than 450 SMME finance offerings from the public and private sector funders in South Africa.

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Gearing up for growth – part 4: Cash flow

Cash flow is the fountain of life for any business. Your capacity for managing cash flow effectively, will determine whether your business will grow or fail. The aim of this article is to provide a few basic guidelines on healthy cash flow, against which to test your existing practices.

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GoLegal – Tax law

GoLegal is South Africa’s most trusted legal information portal. Its page on tax law provides insights into tax law from South Africa’s leading tax lawyers and other tax professionals, examining tax legislation and case law. Find the latest articles and legal opinions with regards to SARS’ conduct, the taxation of local and foreign entities and assets, and the tax consequences of individual and corporate activities, ranging from loans, trusts, share buybacks, REITS, import and export, and more.

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Good record-keeping is key

The words tax, tax man, Receiver and SARS are known to strike fear into the hearts of many an entrepreneur. This is not only because it implies that you have to part with your money, but because the tax process can be a daunting one. A good place to start when getting your taxes in order is by keeping accurate records. That being said, accurate and up-to-date record-keeping is not only about making life easier when you file your taxes. It can also protect your business's cash flow and enable to run a tight ship.

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How SMEs can survive a cash flow crunch

Cash flow is the number one killer of SMEs in South Africa. The announcement that South Africa’s economy has shrunk by 3.2% in the first quarter of 2019 has put further pressure on small business owners who need to manage their cash flow effectively. Daniel Goldberg, co-founder and CEO of Bridgement provides SME owners with advice on how to keep their companies afloat during tough times.

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How to handle a potential client with bad credit

You've looked at a potential client's credit report and recognize the warning signs – late payments, pending lawsuits, heavy debt load. This customer could be a credit risk. Does this mean you have to turn the business down? Maybe not. Take these steps to minimize risk when working with individuals or companies with questionable credit.

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How to weather a cash flow drought

In business, as in life, we can’t expect clear skies every day. There are going to be periods where cash flow is tighter than normal, and it may even dry up to a mere trickle. However, with the right preparation and measures you can weather the cash flow drought and come out the other side stronger than ever.

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Is accounting knowledge necessary when running a small business?

Does a small business owner need to understand their business's financials? Before we answer this question, let's draw a distinction between monthly accounting and financial accounting. Monthly accounting involves bookkeeping, payroll and tax. Financial accounting includes the calculations that allow you to price your products and services. Many small business owners who produce accurate monthly accounts, don't know how to then use those numbers the monthly accounts have produced, to carry out financial accounting. This article explores the importance of having basic accounting knowledge, but outsourcing your accounting needs.

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Positive cash flow leads to success

In the current economic landscape, it comes as no surprise that business owners choose to adapt and change the focus of their business strategy. How much research are you doing to stay on top of your game? The age-old statement "cash is king" has never been more true than it is now. Many businesses are profitable, but run out of money. Managing your cash flow throughout the year can help to alleviate the pressure one feels around this time.

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Projecting cash flow

Cash flow problems often catch small business owners by surprise. An accurate cash flow projection can protect entrepreneurs against this situation. A cash flow projection charts the amounts of money your business expects to receive and pay out each month in a rolling six- or 12-month period. This article looks at a step-by-step process which will guide you through the preparation of a cash flow projection.

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Saving tips for small businesses

More than 70% of small businesses struggle to survive the first two years of operation, with poor cashflow management and insufficient funding being cited as two of the main reasons for failure. July is Savings Month. A time for small businesses to start taking actionable steps to save money. The range of digital tools available online are essential for any business that wants to cut costs. For ideas on how SMBs can get online and save cash, read on.

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The SME challenge – cash flow

I have always thought that cash flow is king. After all this seems to be the traditional wisdom as I understand it. There are plenty of statistics showing how poor cash flow leads to business failure. However I was given a new perspective by a short and impromptu presentation given by Michael Andrew of Action Coach. The blinding flash of the obvious (as Michael likes to put it) was this; the problem isn't cash flow, the problem is a lack of sales.

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Trial balance worksheet

Whatever kind of business you run, you have to close your books at least once a year to prepare an income tax return — or more frequently, if you want to get a better handle on how your business is doing. An important part of closing your books is preparing a trial balance — in other words, a list of all of your bookkeeping accounts and the balance of each at the end of the period — to see if your books are still in balance. If you are already doing this, you know that it is tedious and time-consuming; if your accountant is doing it, you know that it is an added expense.

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Would you rather be the tortoise or the hare?

In a related article, “How not to manage your business and personal finances” I wrote about the Spenders and their business Printing Pain, and how through a lack of focus and self-discipline they landed themselves and their business in a financial mess. Their conduct is in many ways similar to that of the Hare in Aesops fable about the race between a tortoise and a hare. Contrast the Spenders with this case study, which is about the Tortoise* family and their manufacturing business called Wealth Manufacturing*.

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