You know it well. It looks best in green and makes you feel good when it’s in your hands.
It has the potential to lead to your biggest wins, and if handled poorly, your biggest downfalls.
Grab your hard hat and pull up a stump, it’s time to get down to business with this straightforward guide on avoiding cashflow blunders.
1. Time is Money
Procrastination can cost you big time when it comes to invoicing. Don't let those invoices gather dust on your desk or hide in the back of your ute. Why the rush? Timely invoicing means you get paid faster, and your cash keeps flowing in the right direction.
2. Less overheads = less headaches
Take the time to accurately estimate all your expenses, including materials, labor, and overheads. Factor in potential mishaps to cover any unexpected surprises. This will help you avoid costly mistakes and maintain healthy profit margins.
3. Don't overlook it
If it’s not something you’re regularly keeping an eye on, you’ll be up struggle street in no time. Keeping a pulse on your income and expenses will give your company some suspension when tackling whatever terrain comes your way.
4. Keep e leash on your cash transactions
Keeping a tight grip on your hard-earned coin can be tricky. Keep accurate records, reconcile your accounts regularly, and fight the temptation to rely solely on cash transactions. This’ll ensure your finances stay on solid ground.
5. Pick your debt wisely
Taking on too much debt without a clear plan is like stacking bricks without a stable foundation—it's a recipe for disaster. Be mindful of interest rates, repayment terms, and your overall debt levels. Use debt strategically, keeping a balance between investment and financial stability.
6. Stick to the plan
Without a plan, you’ll be stumbling in the dark. Take the time to create a cashflow forecast that outlines your expected income and expenses, both short-term and long term. Consider project timelines, payment schedules, and any seasonal fluctuations that you’re aware of.
If you want any additional advice on budgeting, forecasting, and implementing cashflow tools, give us a call on 1300 040 808 - our team would be happy to help.
Don’t tackle this beast alone, we’re here to help.
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Please note: The financial advice provided in this blog post is intended for general informational purposes only. While the tips and recommendations outlined here are based on best practices and general principles, they may not be applicable or suitable for every construction company's specific financial circumstances. It is important to note that the information provided does not constitute professional financial advice, and we strongly recommend consulting with a qualified financial advisor or accountant before making any financial decisions.