Over the past two years, uncertainty has been the only certainty for small businesses. COVID restrictions, border closures and staff shortages have resulted in significant changes in revenue – meaning cash flow has become a significant pain point.

Even before the Delta outbreak in the middle of 2021, up to 72 per cent of businesses had reported being affected by reduced cash flow.

Government assistance programs – including JobKeeper and JobSaver – have helped, providing businesses nationwide with a total of $136.9 billion to help keep cash flow ticking over.

But, as we move into the ‘living with COVID’ phase and as government support is phased out, managing that cash flow will be critically important for every business to ride out whatever the future has in store.

Kiely Potter, Director, SME Acquisitions, Global Commercial Services at American Express, offers her top tips to help you get your cash flow habits in a strong place for the year ahead.

1. Review financial assistance options

While the majority of the day-to-day government support is coming to an end, there are several grants available to stimulate small business, as well as support from the organisations you deal with regularly too, including financial services providers.

“Know that support is available, so review all the financial assistance options from suppliers, financial service providers and also government,” says Potter.

For example, the Small Business Fees and Charges Rebate NSW is available until June 2022, offering funds to offset costs around eligible food authority licences, liquor licences, tradesperson licences, event fees, outdoor seating fees and council rates.

2. Streamline your business operations

As we approach the end of the year, it’s an opportune time to review your business operations, analyse where you’re spending money and reduce outgoings where you can. As well as increasing your incomings, of course.

Where are you spending money that’s not essential? What outgoings do you have that you could save on by doing things differently? For example, could you automate something that’s costing money or reduce admin labour by using a digital solution? Can you cut down any unnecessary costs and fees associated with your banking?

“Our latest Global Spend Indicator Survey showed that over half of respondents have mostly or fully automated the process of receiving payments from business customers,” says Potter.

3. Re-evaluate your digital processes

During the pandemic, businesses have been forced to re-evaluate how they use digital technologies – and as a result, customer expectation in terms of the service businesses deliver has increased, too. 

Have you explored how embracing digital can help you do things differently, and in turn, either maximise the revenue you’re bringing in or establish a whole new revenue stream? 

“For example, hospitality is doing things a bit differently,” says Potter. “They’re leaning more heavily on services like Deliveroo and UberEats to reach more customers and process orders.”

Potter also advises customers to choose a business charge card that easily connects to the most popular digital payment systems. The American Express Platinum Business Card can be linked to your smartphone or wearable device to make convenient, fast and secure payments with Apple Pay, Samsung Pay and Google Pay.

Having instant access to business financial reporting at the touch of a finger is also useful. The American Express Platinum Business Card provides automatic transaction feeds from your card accounts into business software like Quicken, Microsoft Excel and MYOB.

4. Plan, even when things don’t go according to plan

“Be conservative with growth expectations, and forecast cash flow to help anticipate the movement of cash in and out,” advises Potter.

Planning is everything in business – even when times are unpredictable. By having a clear line of sight on what’s on the horizon, in terms of the peak times and the lulls, the staff and stock you’ll need, and your forecast revenue, you can have a strong baseline of what your cash flow will look like – and when you might need some help to smooth it over.

5. Simplify your supply chains

Throughout COVID, supply chains have been under enormous stress – and even greater scrutiny. Can you leverage flexible payment terms with suppliers, or maybe use your suppliers to help you diversify into different product or service lines? Conduct a quick supplier audit to ensure you’re getting maximum value for money.  

“People are looking at things a bit differently,” explains Potter. “They’re moving into other fields – new products, new revenue streams.”

6. Review your staff needs

A feature of the past two years has been the changing dynamics of ‘work’. So, how can you utilise this?

Model the benefits of hiring external independent contractors and remote workers, if there are opportunities to do so. Tapping into this workforce is easier said than done for some sectors than others, of course, but by asking ‘what if?’ you can explore the possibilities a more flexible workforce that isn’t just tied to a permanent full-time makeup.

7. Be agile with payment terms

“Agile” has been the business buzzword throughout COVID, and with good reason. The more agile you are, the easier you can respond to whatever the world throws in your direction. 

“Consider using a better business charge card to realise reward benefits and increase operational flexibility by extending payment windows out,” suggests Potter. 

“These are the things that traditional payment methods just can’t offer. Some American Express business cards provide interest-free days that really allow you the breathing space between accessing capital and paying for it.”

The American Express Platinum Business Card has no pre-set spending limit, up to 55 interest-free cash flow days and flexible payment options – and can be a smart choice for businesses looking to smooth their cash flow cycles. It’s possible with platinum – find out more info here.

This article is brought to you by Kochie’s Business Builders in partnership with American Express.

This information is intended to provide general information of an educational nature only. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances. Any opinions, views of contributors, conclusions or recommendations are reasonably held or made, based on the information available of compilation, but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this information.

Feature image: AdobeStock