Decoder: How To Manage Cashflow As A Botswana Startup

As the old saying goes, "cash is king". Knowing how to properly manage cash flow can be the difference between life and death for a startup. The following are seven ways for a Botswana startup to manage its cashflow so it can remain in the green, literally and metaphorically.

1. Create a cash flow forecast:

Develop a cash flow forecast that shows when cash is expected to come in and go out.

This will help you anticipate cash shortages and surpluses and plan accordingly.

2. Manage accounts receivable:

Collect outstanding payments from customers promptly and consider offering incentives for early payments.

This will improve cash flow and reduce the risk of bad debts.

3. Control expenses:

Control expenses by setting budgets, monitoring spending, and reducing costs wherever possible. This will help to preserve cash and improve profitability.

4. Manage accounts payable:

Negotiate payment terms with suppliers to extend payment periods where possible. This will help to delay outflows of cash and improve cash flow.

5. Maintain adequate working capital:

Maintain adequate working capital to meet short-term cash needs. This can be done by keeping cash reserves, securing lines of credit, or using factoring or invoice financing.

6. Monitor cash flow regularly:

Monitor cash flow regularly and update your cash flow forecast accordingly. This will help you stay on top of any changes in cash flow and adjust your plans accordingly.

7. Use a Cash Action Plan

Set up a Cash Action Plan and drumbeat meetings. Get first the quick wins and involve the operational teams for long term results (educate, communicate & follow-up).

Source: LinkedIn/Nicolas Boucher

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