3 tips to manage your money better

3 tips to manage your money better :


  1. Create a cash flow budget

A cash flow budget helps to ensure that you can comfortably pay all your expenses and enables you to manage your revenues and expenses proactively. Key components include a sales/revenue forecast; anticipated inflows, such as accounts receivable; anticipated outflows, such as cost of goods sold; debt repayments; and operating expenses.It’s important to keep your cash flow budget up-to-date and to make sure that it reflects changes in your operating environment and your plans for your business.


     2. Manage the credit you are extending to your customers

There are a number of different ways to improve how you manage your receivables.Establishing effective credit policies is an important part of successful cash flow management.You might also think about how you can encourage clients to pay more quickly. For example, consider discounts for early payments, or charge interest on accounts that are past due.

While interest and late charges may actually become a source of income for your business, it’s important to apply some due diligence. Extremely late payments are more likely to become write-offs and will also keep some of your working capital tied up.


3.Put your company’s surplus cash flow to work


Assess how much money you need to set aside for emergencies.To do this, review your company’s cash flow history for any patterns.As well, consider how potential changes in the economy, such as currency or interest rate fluctuations, could affect your revenues or expenses.Any surplus in your cash flow can be used for business expansion, to pay off debts, or to maintain a certain level of working capital.


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