Using POS Software to Control Cash Flow

 

Cash flow text

Recent studies by National Australia Bank show that 93% of business owners and managers worry about cash flow, causing effects on their personal lives. Put together a solid cash flow forecast using your POS software.

Keep it simple

Keep it as simple as you can. Focus on issues that you can control and affect your cash flow the most. Then work any extra issues as you find them.

Standard cash flow methods

Ensure you collect cash flow measurement using the same collection standards.

Use your POS software to chart the data

Use a simple chart with control limits so data can have a variation between the acceptable guide lines. I call these upper and lower control limits, where collected data can run without having to react. If you get a run of 7 or more consecutive data points above or below the average line or outside control limits then investigation and corrective action is required.

Team approach

Utilise your team for data collection and identifying what data affects your business. It's imperative that all collected data is recorded accurately and in a timely manner. Review all data at set intervals or when an out of control situation occurs (any point outside of a control limit). Give feedback and reward all people connected with this process.

To Do List

Collection of data from your POS software normally leads to a "to do list" prioritise your list. High priority jobs must be done because they have biggest influence on your cash flow. Work your way down the list as you go.

POS Software to monitor debtors

Monitoring the age of debtors and when out of control, hit the phones and chase non paying customers. Try and deal with the same person each call and ensure you have the correct contact details. Check that there is no dispute with the invoice, as these are many of the excuses fired back to delay payment. Handling these issues first shortens the delaying tactics and gets the payment faster.

Redundant stock

Have a plan to control stock on hand levels and use your POS software reports to indicate slow moving items. Use a marketing plan to reduce or eliminate these items. Don't just mark down the prices; this is the last option you should use. Clearing out slow moving items will make room and provide cash to bring in NEW lines with an acceptable stock turn and margin.