If there’s one lesson to be learned in the current challenging business environment, it’s this: businesses who understand the importance of positive cash flow are more likely to survive and prosper.
Why is that, and why is managing your business cash flow so important?
Your cash position is likely to have peaks and troughs
Many businesses are seasonal, with some periods when sales are booming and others where turnover is slow. And even if your level of activity is fairly stable throughout the year, your debtors may sometimes be slow to pay, and operating costs may peak at certain times when you need to purchase inventory or new equipment or pay quarterly or annual bills. Good cash flow planning keeps the wheels turning in all these situations, so it’s important to have a cash flow forecast and constantly monitor your cash position.
Cash flow management helps you make well-timed decisions
If you can identify when you will have extra cash available, you could take advantage of short-term supplier discount offers, early payment concessions or rebates for bulk purchasing. And being able to predict a temporary cash shortage gives you time to plan a sales boost with advertising or incentives, trim your expenses, review stock levels and put additional effort into collecting debts.
Business insurance is vital, but annual premiums can disrupt your cash flow
Prudent business operators take the advice on possible risks from fire, theft, accidents and public liability claims, and then understand the importance of taking out business insurance to mitigate their exposure. But a hefty annual premium can be difficult to accommodate in your normal monthly cash flow. Many businesses may have insufficient cash reserves or prefer to keep their surplus cash available for the regular demands on working capital.
Insurance Premium Funding lets you pay for the insurance you need in easy monthly instalments
There’s no need to be under-insured because the annual premium is unmanageable. We can help you finance your premium via Insurance Premium Funding. Once you’ve chosen an insurance package tailored for your business by your own insurer, the finance provider will pay the annual premium upfront on your behalf. You then repay the loan to the finance provider in affordable monthly instalments. The interest rate is fixed, there are no service fees to pay, and you don’t need to offer your property as security for the loan.
Let us help you manage your cash flow without skimping on insurance
The extraordinary challenges of the current financial year have taught us the true value of being fully insured.
Original post by Bank of Queensland