Key points
- Track receivables bill by bill and act on overdue ones.
- Plan payables by due date.
- Set credit limits before giving more goods.
- Reconcile bank regularly.
- Review cash position weekly, not monthly.
Where cash gets stuck
| Place | Sign | ERP report |
|---|---|---|
| Customers | Old unpaid bills | Receivables ageing |
| Stock | Items not selling | Stock age |
| Advances to suppliers | Paid, goods not received | Supplier ledger |
| Expenses | Rising without notice | Expense report by head |
Receivables
- Record payments against bills So you know exactly what is pending.
- Set credit limits and days For each customer.
- Send reminders Automatically, with bills attached.
- Review weekly Overdue 30, 60, 90 days.
Payables
Pay suppliers on their due dates, not earlier unless there is a discount. Remember that GST credit must be reversed if a supplier isn’t paid within 180 days.
Bank and cash
Match bank entries with the bank statement regularly. Count cash daily against the system. Differences found early are easy to explain.
Expenses
Record expenses under clear heads like rent, salaries, transport and electricity. Monthly comparison shows what is creeping up.
A weekly cash routine
- Cash and bank balance today.
- Collections expected this week.
- Payments due this week.
- Overdue customers to call.
Common cash mistakes
| Mistake | Fix |
|---|---|
| Recording payments on account, not against bills | Match each payment to specific bills |
| Paying suppliers early without a discount | Pay on due dates |
| Mixing personal and business expenses | Separate accounts and expense heads |
| Reconciling the bank once a year | Reconcile monthly or weekly |
| Giving credit without limits | Set limits and days for each customer |
Questions to ask your numbers each month
- Are customers taking longer to pay than last month?
- Is stock growing faster than sales?
- Which expenses grew the most?
- How many weeks of expenses can current cash cover?