In this article there are ideas on how to manage your cashflow and a spreadsheet that will help you manage your cash and tell you how much money you really have. How much money you have to pay out and whether or not you can pay anyone.The spreadsheet needs no special skills to use and there is a user manual and a video.

Can you write a cheque right now?

Do you ever think when you write a cheque as to whether or not there is money in your bank account to meet it? When the person you pay lodges it in their bank account and it gets taken from your account, will their be enough funds in your account to meet the amount you wrote the cheque for.

Now we are all in a situation where you hope that cheques you receive from your customers will not "bounce" (be dishonoured). When you lodge a customers cheque in your account, it could take 5 days before you know whether or not it has bounced or not.

** DO NOT RELY ON THE AMOUNT YOUR BANK SAYS YOU HAVE AS THIS DOES NOT TAKE INTO ACCOUNT CHEQUES YOU HAVE WRITTEN THAT ARE NOT YET TAKEN FROM YOUR ACCOUNT AND FOR DIRECT DEBITS AND STANDING ORDERS YET TO BE CHARGED TO YOUR ACCOUNT **

Do you know right now that with your bank account;

1. To what value you can write cheques for i.e. if a supplier calls you on the phone right now and asks you to pay him now, can you write that cheque?

2. The wages come due for payment tomorrow, will you have the money

3. What is the value of direct debits and standing orders that will that come through your account each month. These get paid automatically by the bank, do you know when they come due for payment

4. Do you know the total amount you will have to pat out this month

How to ensure you get paid

• Know who owes you money, how much and when it comes due

• When opening new customer accounts, get credit references and copies of their annual accounts

• Get all new customers to complete a credit application form completely

• Make a list of every customer who owes you money and start calling for money

• Get customers to pay you by electronic transfer

• Set up standing orders or direct debits with customers

• Ask to be paid by bank draft

• Ask to be paid by cash

• Reduce the amount of credit given

• Reduce the number of days credit given e.g. 60 days to 30 days

• Close slow paying accounts i.e take away their credit

• Deal only a cash account basis i.e. they pay there and then

• Use a cheque guarantee facility to protect you from suppliers who cheques bounce

• Get a post dated cheque, but this will not guarantee you that the cheque will be honoured and you may have supplied more goods to the customer since

How to ensure you keep suppliers happy

• Make a list of all payments that should be made to suppliers for the month

• This allows you to know how much money you have to collect from your customers in order to pay suppliers and wages and taxes.

• Paying part of a debt to a supplier may give you more time to pay the balance. A supplier who constantly calls you on the phone takes up your valuable time. Paying part of a debt reduces the number of calls and puts you on his good side

• Don't give out post dated cheques as this requires you to manage when all these cheques come due and to ensure you have to cash to meet them at some date in the future. And if these post dated cheques bounce, be prepared for your supplier to take drastic action against you.

Spreadsheet to help manage your cash flow

This is for you to f r e e l y use in your business. It allows up to 100 transactions per month in a spreadsheet

Download from the spreadsheet home page Cash Flow Spreadsheet

We have a manual PDF Manual and a Video.

The Spreadsheet can be found here

This spreadsheet will make you alert to the cash in your business. You must keep it up to date to get any advantage from it. All those who have started using it have found it a great tool when it comes to managing their cash.

• It will warn you if you don't have enough money to pay your bills

• It will show you how much cash you really have available to work with

• It will show you the total amount received and the total amount paid out each month

• It will allow you to record every cheque you write in sequence and make it easy to find cheques that you have written

• It allows you to list all the direct debits and standing orders you pay out every month and exactly how much these cost you and who you are paying them to.

(c) Helpforbookkeepers.com 2009