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Enhancing Cashflow Management for New Zealand SMEs: A Strategic Approach
Cashflow is one of the most critical aspects of successful business ownership for small to medium enterprises in New Zealand today. Cashflow issues can just as easily arise from rapid growth and expansion, as from sales revenue decreases or expense increases.
At Think Differently Group we understand that Cashflow can be a complex issue. We have had personal experience “in” it – as some of our grey hairs (or lack of hair) will testify to! We know that correct “problem” analysis is more important than throwing a raft of solutions at a problem we don’t fully understand.
We will support you through a process that will allow you to:
In navigating the labyrinth of cashflow management, Think Differently Group stands as your partner in illuminating the path to financial stability. By accurately diagnosing core issues, addressing immediate challenges, and fortifying against future uncertainties, our holistic approach ensures that your business can boldly stride into a future unhampered by cashflow crises.
Cashflow refers to the movement of money into and out of a business. It s the difference between money coming in (revenue) and money going out (expenses)
Cashflow is critical because it ensures that you have enough money to cover your bills, debts and expenses. It also allows you to invest in, and grow your business, and plan for future investment and growth
Cashflow problems can arise from various sources, including slow-paying customers, excessive spending, unexpected expenses and seasonal fluctuations in income
There are several ways to improve cashflow, such as reducing expenses, getting paid by your customers earlier, negotiating better payment terms with suppliers and securing financing or loans. Every situation can be different and require different levels of analysis, however. So it is often best to ask for help, especially from someone outside of your business to give a different perspective
Profit is the difference between revenues and expenses, but cashflow focuses on the movement of money. It’s possible for a business to be profitable on paper but still have cashflow issues if money is tied up in stock or accounts receivable
You can manage accounts receivable by invoicing promptly, offering discounts for early payments, and following up on overdue payments. You can also consider factoring or using invoice financing services.
A cash flow statement is a financial statement that shows the inflow and outflow of cash over a specific period. It helps you track how cash moves through your business and identify potential issues or opportunities.
If you have more expenses than income, you may need to cut costs, renegotiate contracts, or explore additional sources of revenue. You might also need to consider short-term loans or lines of credit to cover essential expenses.
In emergencies, you can consider selling assets, borrowing money, reducing staff or hours, and prioritising essential expenses over discretionary spending.
Cash flow projections involve estimating future cash inflows and outflows. You can create one by analysing historical data, considering future sales and expenses, and accounting for any expected changes in your financial situation.
If you’re unable to manage cash flow problems on your own, it’s advisable to seek assistance from financial advisors, accountants, or business consultants who specialise in cash flow management.
To prevent cash flow issues, establish a budget, build up an emergency fund, maintain good relationships with customers and suppliers, and regularly review and update your financial forecasts
Clare McCall
J C McCall Plumbing Ctractors Ltd
We have been working with Phil since 2012. During this time we have grown from a staff of 10 to well over 30 and quadrupled our turnover. Working with Phil has enabled us to develop strategies and implement plans that we didn’t even know we needed before meeting him. At the beginning of our journey together we were not working on our business at all and, to be honest, we were floundering. Now our leadership is strong, our strategy is clear and we have exceeded most of the goals we have set for ourselves.
Natasha Bourke
Managing Director Skin Health Experts (S.H.E)
Phil Pickford has provided considerable support to our business since we began working together in 2008. Over the years he has counseled, advised, mentored and coached me (and my team) on a vast array of subjects! The focus of our meetings has always been on business strategy but he has provided enormous support in other areas as well (management, HR, new business, and organisational structure to name a few). Phil is always very prepared, the meetings are well structured, and his follow up is timely and concise.
Warwick Shearer
Director, The Maintenance Guys Ltd.
We have been using Think Differently for over 2 years and have seen remarkable gains in our business, over 50% growth each year. We have consistently broken sales records and have become a leading force in our field. Phil is an outstanding mentor with an invaluable wealth of knowledge and I couldn’t recommend him enough.
Warwick Shearer
Director, The Maintenance Guys Ltd.
We have been using Think Differently for over 2 years and have seen remarkable gains in our business, over 50% growth each year. We have consistently broken sales records and have become a leading force in our field. Phil is an outstanding mentor with an invaluable wealth of knowledge and I couldn’t recommend him enough.
If you’re ready to take your business to the next level, get in touch with us today at 021 431990. The Think Differently team is passionate about Business Success and is ready to work with you today.
© 2023 – Think Differently
We want to see Your Business Succeed, so our Gift to You is a no cost Strategic Planning Session to help your Business Grow. Contact us Now.