Cash flow has become one of the serious issues in small businesses. It’s even more complicated when your business is profitable. In fact, many businesses with high profit, can get ruined if they don’t have enough cash to fund the business.

Profit is not the only source to generate cash. You can actually create cash for the business by contributing personal funds, selling assets or using bank loans. So, if you are confused on why you are able to make profit, but no cash, then you should follow these two easy tasks:

Focus on the Right Things

Focusing only on profit will never help in generating cash, you need to conceptualize on what drives your cash flow. Keep a record of tracking accounts receivable and following up on late payments. Put your loan repayments and rent on time and never delay these types of payments.

Allow yourself to keep a finance facility in place that will tide you over during a cash flow shortage and prepare yourself to sacrifice profit as to save your cash flow.

Invest at the Right Time

As we all know, we don’t spend profit, we spend cash in our business. To make a better profit, you first need to purchase goods and services to bring them out on sell. The thing you need here is cash before the sale is made. And by selling your products at a higher range, you make profit. The main point is you need the cash to get the profit.

Do not let your business downgrade just because of the credit you provided to your clients or not keeping the right track of your accounts. Make sure you are spending how much you should and where you are investing at.

These two ways can help you in maintaining cash flow within maximising profit, but Harley Street Accountants can help you even more. Place a quick call at 020 7060 9556 today!