To create awareness of the importance of financial saving, the South African Savings Institute (SASI), has earmarked the month of July as Savings Month. This is particularly pertinent, given the trying financial circumstances many individuals and businesses are in on the back of ongoing COVID-19 restrictions.
Gary Epstein, Managing Director at EasyBiz Technologies, the partner for QuickBooks Online in South Africa explains that creating awareness around financial saving is important for businesses, and that cash flow management is critical for their survival.
“Many businesses are still travelling the road to financial recovery, with stricter lockdowns continuing to be proverbial potholes that hinder their progress,” he adds. As the third wave of the pandemic continues to crest across several provinces in the country, businesses need to be vigilant in ensuring adequate cash-flow reserves are available, particularly as we head into the latter half of 2021,” he adds.
Epstein offers four tips that he considers essential for businesses to consider ensuring continued cash flow throughout the year.
Grow cash reserves
All businesses should plan to build up cash reserves. For many, this practice has been their saving grace, ensuring business continuity in the face of lockdown measures over the past year. Businesses need to commit to doing all they can to save money each month, and those that make use of accounting solutions such as QuickBooks Online can make the process of finance and expenditure monitoring that much easier, thanks to third-party add-ons.
Scale down expenses
Many businesses have successfully adopted the practice of remote working, which means they are well-positioned to review the need for large and expensive office space. With some businesses still recuperating from the troubles of 2020, expenses need to be monitored and, where possible, trimmed.
Invoice early and reduce late payments
A thorough invoicing strategy should be in place to reduce instances of having to chase customers for payments, and businesses should instil a sense of being direct and fair with customers. Plan accordingly by contacting late payers well in advance, invoicing them early and reminding them to pay on time.
Use accounting services
Businesses that are not confident in their financial aptitude should consider investing in reputable accounting software, which will offer them peace of mind, as well as the ability to forecast cash flow for future opportunities.
“Software solutions such as QuickBooks Online can simplify the accounting process, and provide customers with the tools and resources they need to stay ahead of the competition.”
Epstein concludes that while the majority of industries have experienced hardships in recent times, instilling cash-flow management measures such as these will allow for greater financial freedom in the coming years.