Step 2 of 5

Improve your cash flow and save costs

You have gained a better insight into your situation and know how to boost your company. Now it is time to look at the financial picture.

Once you know what you can tighten up and where your opportunities and challenges lie, create an operating budget. An operating budget makes it clear whether you expect profits or losses in the coming period. You take into account the results of your strength-weakness analysis. For example, you may need to consider a longer period before you have acquired a new target group.

Make a liquidity budget

Then work out a liquidity budget. With a liquidity budget, you track your company's money. You calculate how much money is in your bank account after income and expenses. This way you always know whether there is enough money to pay your bills. In your liquidity budget, you make clear how much money you have left or are short of every 3 months.

Then you look for ways to improve your cash flow. Cash flow is the difference between your income and expenses in your business account.

Video: Make a financial plan

Improve your cash flow

Do any customers still owe you money? Then get started with accounts receivable management. Invoice quickly, request advance payment, and make digital payment as easy as possible for your customer.

With good accounts payable management, pay invoices to your suppliers on time, but not too early. Also, look critically at your inventory. Money is tied up in there that you cannot use directly for your business. Explore different ways you can improve cash flow without financing. 

Make an investment budget

In an investment budget, you list what you want to invest in and what it will cost. For example, invest in sustainable business operations or premises. This will save you costs in the long run. Are your business processes adapted to the future? Invest in digitalisation. That will save you time and money. 

Save costs

You can save even more costs. Differentiate between immediate savings and a more comprehensive savings plan for a longer period. A few tips on how to go about this.

  • Reduce your business costs and personal expenses. Apply bootstrapping.
  • Refinance expensive loans or rent out part of your business space.
  • Save on energy costs.
  • Calculate if you can save on your business assets. Is it better to rent, borrow, lease or buy that machine, laptop or company car?
Step 1Step 3

KVK Advice Team

Do you have questions about budgets? Call the KVK Advice Team 088 585 22 22.