4 cash management tricks you will swear by

Presenting the best budgeting and management tips that will hold your business in good stead always.

The biggest businesses in the country have several financial tricks up their sleeves. No, we’re not talking of money made from malpractice; far from it. Successful companies understand how to manage and allocate their finances so that they always maintain healthy reserves and meet their daily working costs. These are lessons in financial management that all companies must learn.

If you are a business owner wondering how to manage your finances better, consider these 4 simple cash management tricks:

1. Trim the fat. Many businesses today are over-staffed. They also operate out of huge premises. The company spends a lot of money every month paying staff salaries and office overheads. Imagine how much money can be saved by downsizing and shifting to a space that accommodates the remaining staff comfortably. You can put the staff members who you do not need daily on contract or commission-based jobs, or lease out part of the office that is not being used, or even allow some staff to function remotely.
2. Streamline your receivables. Several companies are periodically in dire straits because their customers do not pay them on time. This causes a gap in working capital. Start by billing customers the moment the project is completed. Follow up on unpaid payments diligently. If some customers are habitual late payers, you can incentivise early payments by offering a discount on the bill amount if they pay within 15 days of receiving the bill. Customers will certainly see merit in saving some money – and your bill will be cleared earlier! 
3. Let your bank become your financial manager. Your bank can do much more than hold your business income and clear cheques. Entrust your bank with cash management services for your company. The best banks today offer a gamut of cash management services in India. The bank is better placed to study the company’s finances, offer good products and services tailored to the company’s requirements, and manage payments and cash inflows. Cash management services also encompass forecasting and planning for the company.
4. Be careful about taxes. You may lose a lot of money in penalties and invite the tax authorities’ scanner on your finances by not paying your taxes on time. This omission may not be deliberate, but it can be costly. Hire a competent firm of chartered accountants who can file your tax returns on time and get the payments settled (if you owe tax to the Government). You must also get your firm registered for GST, so you must understand the new taxation regime from April 1, 2017 onward.