PRESS RELEASE: Small businesses can better their cash flow with six simple steps

MEDIA RELEASE

FOR IMMEDIATE RELEASE

Small businesses can better their cash flow with six simple steps

• It has been reported that 49 per cent (https://about.americanexpress.com/newsroom/press-releases/news-details/2022/Cash-Flow-Uncertainty-from-Australian-Small-Business-Owners-is-Impacting-their-Mental-Wellbeing–/default.aspx) of small business owners are using their personal funds to pay their outgoing business expenses.
• One in five (https://about.americanexpress.com/newsroom/press-releases/news-details/2022/Cash-Flow-Uncertainty-from-Australian-Small-Business-Owners-is-Impacting-their-Mental-Wellbeing–/default.aspx) small business owners say their physical wellbeing has been affected by cash flow tension when operating their business.
• When uninsured, small businesses increase the risk of facing financial hardship and this is where a Business Insurance Pack (https://www.bizcover.com.au/business-insurance/)is a range of Business Insurance products that can provide financial cover for a business.

Recently published research by American Express (https://www.bizcover.com.au/business-insurance/ has found that almost half (49 per cent) of Australian small business owners find managing cash flow the most stressful part of running their business. 31 per cent reported losing sleep due to the stress of cash flow management, 21 per cent have had their physical wellbeing affected by cash flow tension, and 22 per cent have experienced strain on their personal relationships due to this pressing issue.

What’s more, American Express’ Working Capital Research, published on October 6, also highlighted that 17 per cent (https://about.americanexpress.com/newsroom/press-releases/news-details/2022/Cash-Flow-Uncertainty-from-Australian-Small-Business-Owners-is-Impacting-their-Mental-Wellbeing–/default.aspx) of Australian small business owners have considered closing their small business due to cash flow challenges impacting their health and wellbeing.

Six small business cashflow management tips

Keep your financial records up to date and accurate

Cash flow management in a small business will only ever be as accurate as the business’s accounting and reporting. While staying on top of cash flow management can be tricky, bigger business challenges can arise if you fall behind with your accounting and reporting. To help avoid that, routinely update your financial records, which can make it easier to gauge where your business stands financially at any given time.

Keep cash in reserve to reduce risks to your business

Not having access to cash when you really need it can make or break a small business. One of the most important cash flow management tips for small business owners can be to keep cash in reserve, which can provide a buffer to help you manage unexpected events that may impact your small business.

Be lenient with your customers – to a point

Your customers will appreciate some leniency with their payment terms, especially when business is slow. However, it’s important that you maintain your profit margins. Be fair and direct, but never a pushover. Set the terms that first and foremost work for your business.

Seek help from a finance professional

If you’re not confident with numbers, or don’t have the time to do it yourself, you may benefit from hiring a professional accountant to manage your business finances. If you are doing it yourself, you may consider one of the many accounting software products on the market that help simplify cash flow management for small business owners.

Segment your finances

A simple but essential cash flow management tip for small business owners is to keep your personal bank accounts and business bank accounts separate. You may even have each of them with different banks just to draw a clear line between your business funds and your personal funds. You don’t want your business funds going into your personal account and vice versa.

Reduce your risk via business insurance

Forewarned is forearmed, and a key cashflow management tip for small business owners is reducing the risks to their business via business insurance (https://www.bizcover.com.au/what-is-business-insurance/).

“Business insurance products such as Public Liability Insurance (https://www.bizcover.com.au/what-is-public-liability-insurance/), Building & Contents Insurance (https://www.bizcover.com.au/online/business-building-and-contents-insurance), a Business Insurance Pack (https://www.bizcover.com.au/business-insurance/), and Business Interruption Insurance (https://www.bizcover.com.au/business-interruption/) can help small business owners to maintain their cash reserve at a comfortable level by indemnifying you for claims or lawsuits that can be very costly when they occur,” explains Jane Mason, Head of Product, Channels & Risk at business insurance comparison website BizCover.

Claims and lawsuits can be very expensive for small business owners. Not only can they add additional stress to running a small business, but they can also impact your cash flow and potentially reduce the cash your business has in reserve.”

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.

© 2022 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769

ENDS

ABOUT BIZCOVER
BizCover is Australia’s largest online business insurance service for SMEs. Operating globally in Australia, New Zealand and the US, more than 180,000 SMEs currently protect their business through BizCover’s proprietary platform.

BizCover allows SMEs to compare multiple free quotes from multiple insurers offering small business owners the option to choose from competitive market rates, purchasing online and getting policy documents delivered instantly.

To date, over one million business insurance policies have been sold through the BizCover platform globally partnered with a panel of leading global insurers. BizCover also provides market-leading solutions to the General Insurance Broking Industry including BizCover for Brokers and ExpressCover.

To learn more about BizCover visit bizcover.com.au.

Media enquiries to:

Sharon Kenny
Head of Marketing
M: 0403 048 084