- Failing to plan for market volatility and changing conditions. Be prepared for the potential effects of higher input costs. Consider using risk management tools to reduce your exposure to changing interest rates and exchange rates, and use business risk insurance to protect your assets and your income. Use an online financial management tool like CommBiz or NetBank to stay on top of your cash flow position.
- Tying up capital in stock and equipment. Turn over excess stock, even at a discount. Consider using leasing solutions for equipment, instead of tying up cash.
- Buying long-term assets out of current cash flow. Use longer-term lending solutions for capital assets. Match the length of the loan to the life of the asset.
- Failing to put excess cash to work. Look for cash reserves in your business, such as money you’ve set aside for stock or GST liabilities, then put it to work with a Business Online Saver.
- Collecting accounts receivable too slowly. Monitor accounts receivable carefully. Have a system in place to follow up overdue accounts. Use electronic payment solutions to put cash in your bank account faster.