20th November, 2023
What’s the key difference between riding high on the eCommerce wave and feeling like you’re constantly treading water? Simple — cashflow.
If you’re running a business without enough cash on hand, it can be really stressful.
You can’t buy the stock you need, pay your bills on time or chase opportunities when they come knocking.
Whether you’re just starting or want to fine-tune your finances, here’s a look at why eCommerce cashflow is so important and how to manage and forecast it effectively.
Cashflow management isn’t about whether your business is profitable – although that certainly helps. It’s about having cash on hand when you need it.
When you have your cashflow under control, you have the confidence to make strategic decisions, invest in growth, and steer your business towards success.
But despite its importance, 82% of businesses struggle with poor cashflow management.
Usually, it’s from not forecasting their cashflow, or relying on manual, error-prone spreadsheets.
The solution? Specialised software to accurately and automatically track and predict what’s coming in and going out.
You can customise your account mapping in MYOB, meaning you can track products by product or category. This gives you a more in-depth understanding of your sales.
This gives you a clear picture of how money moves in and out of your business so you can make smarter decisions about when to invest, save and spend.
It also helps you predict financial trends and spot potential problems early to plan for busy seasons or likely dips in cashflow.
Perhaps most importantly, it frees your time and mental energy.
Instead of manually tracking every transaction, the software does it for you, leaving you more time to focus on growing your business and serving your customers.
Forecasting your eCommerce cashflow starts with knowing how much you’ll have in the bank at the beginning of the month.
Then, you predict what money will be coming in and out in a best-case, typical and worst-case month.
Consider any seasonal or economic factors — do you see an uptick in sales over school holidays? Does the weather make a difference? The more realistic you can be, the more valuable your forecast.
While your business may not always grow consistently, your accounting software can generate a detailed cashflow statement, helping you fine-tune your forecasting. Ideally, you should do this monthly.
And at the end of each month, compare your predictions with the actual money that came in and went out. That way, your forecasting will improve as you go along.
Predicting cashflow is an important first step, but there are other things you can do to keep the cash flowing.
In the fast-moving world of online business, managing your cash is the key to making it work.
Also, if you understand how money flows in and out, use tools that predict your finances, and follow smart money habits, you’ll gain the power to strategically plan for expansion and boost your earnings.
Finally, with MYOB’s cashflow tools, you can plan for growth and make more money in the online world.
Ready to master your eCommerce cashflow? Sign up for MYOB Business today.