A lot of business struggle to keep a balancing act of making sure that their accounts receivable and their accounts payable are in order.
It is a usual struggle for business owners to make sure that their customers pay up on time while paying only at the last minute to your suppliers.
Doing these things will require accurate accounting and bookkeeping services in Malaysia. Everything should be running smoothly to ensure that you make all involved parties happy.
If you somehow end up in a cash flow crisis and you are facing a huge dilemma of paying your bills, then the best accounting practices I will highlight below should help you in some way:
Always Prepare Accurate Financial Statements
Whether you have in-house bookkeepers or you outsource your accounting professionals, it is important that you have them create accurate financial statements at all times. This is typically a job that bookkeepers do, but some accountants are also well-versed at this.
Financial statements carry a lot of information about the financial health of your company. This includes cash flow entries, as well as income statements, among many other accounting terms.
As the business owner, you should know of these things so that you can easily interpret and make decisions based on the data that was collected by your bookkeepers and accountants.
Handle Customer Payments in a Timely Manner
A business owner will always have customers who pay their dues diligently, though there are some that have a proven track record of paying up late.
Do not worry. If you are experiencing a financial crisis, you can always contact your customers whom you have built a strong relationship with over the years and tell them that you need their payment to get by.
You also have to take into consideration that there are people that would likely pay you when it is already the due date, so constantly remind them about their dues so that they can pay you at that time.
Consider Your Borrowing Options
In the best circumstances, you should open a line of credit if your business is experiencing good cash flow. That is because your chances of getting approved by a financial institution grow exponentially if you have a healthy company bank account.
That being said, what if you are experiencing a crisis? Well, major banks and lenders might be reluctant to let you borrow huge amounts of money, which is why I urge you to explore your borrowing options.
Typically, you can get assets from different lenders. Although you are experiencing a crisis, if you have a good financial track record, you are going to get the money that you need to get by in business.
Sell Assets that You Do Not Really Need
Take a look at your current inventory to find out possible assets that you can sell. Look for things that you rarely use or those that are not really needed to provide service to critical business operations.