There is no doubt that poor cash flow management is one of the leading causes of corporate bankruptcy.

If you don't manage your money well, you may run out of money to pay for your daily expenses, buy supplies, or even pay your team members.

When you run a small business, you must be prepared for the unexpected costs and how to manage them.

Fortunately, most of the cash flow problems companies face can be avoided if you play your cards right.

Begin with a plan
If you don't have a solid business plan, you are setting yourself up for failure.

A business plan is like a roadmap that outlines for you the steps that will lead to your success. Writing it down also helps you assess the feasibility of your business idea.

One of the main elements of a business plan is the projection of cash flows. It is a projection that defines how the cashier enters and leaves your company.


Monitoring and analysis
Having a good plan is not enough. Once your business is up and running, you will need a good system to track and analyze your cash flow.

This will show if your company is operating with the expected efficiency. Monitoring and analysis are essential for future planning and current decision making.

Consider investing in software that can help you track and analyze your cash flow quickly and efficiently.
Facilitate quick payment for customers
A good percentage of late payments are due to mistakes by the business owner and not by customers. To make sure your customers pay quickly, consider the following five tips:

Submit your invoices on time. You can automate your processes so that your customers receive their invoices immediately after completing the transaction.
Offer your customers payment options. You can do a quick search with certain customers to get their preferred payment methods.
Check that your invoices are free of errors and clear and include the terms of payment. By observing the invoice, the customer must be able to easily indicate who is the sender, the goods and services he pays, how much he must pay and the payment period. If your invoice does not indicate the sender or the nature of the products, customers can separate it, thinking that it is an error. This will cause late payments. The same can happen when you charge incorrect amounts. So be sure to send a clear, error-free invoice on time.
Consider sending reminders to your customers to pay their bills on time. You can find software that does this automatically.
You can offer a discount for advances. This can be a good motivation for your customers to pay their bills quickly.


Keep your expenses low
When businesses are new, it is good to work to keep your expenses low, especially when the money going into the business is not that high. There are many steps to do this.

For example, you might consider starting your home business instead of buying or hiring an office.

To start a home business, set up your workspace, read tips for earning a full-time living at home, and find legal requirements for local businesses.

Check all rules and regulations before configuration to avoid problems with the law.


Be creative with sales and marketing
Start marketing before launching to make your business prosper from the start. Also avoid complicating the sales process, as this could cause you to lose a potential business.

Finally, prepare for emergencies. Keep a good credit history because you never know when you will need financing.

Also consider setting up an emergency fund for these unexpected expenses.