Cash flow is the lifeblood of any small business, especially in Nigeria’s dynamic economic environment. Effective cash flow management can mean the difference between business survival and failure. Start by creating detailed cash flow projections that account for seasonal variations and potential economic challenges.
Implement strict invoicing and payment collection processes. Consider offering small discounts for early payments or using digital payment platforms to accelerate cash receipts. Negotiate favorable payment terms with suppliers and maintain a cash reserve to buffer against unexpected expenses or revenue fluctuations.
Monitor your cash conversion cycle closely. Look for opportunities to reduce inventory costs, manage receivables more efficiently, and control operating expenses. Leverage technology and accounting software to gain real-time insights into your financial performance and make data-driven decisions.