Tagcashflow

In our work serving small business retailers in Australia and New Zealand we get to talk more than software. Often we talk business. Cashflow is a regular topic: how to improve it, how to strengthen the financial basis of the business.

This post today is about cashflow in local small retail businesses. It draws on our many years of experience seeing data from a range of businesses.

Retail businesses rarely close because they were unprofitable on paper. They close because they ran out of cash. Profit is an opinion until the money is in the bank, and cash flow is where good retail habits show up or fall apart.

Here is our best practice advice, drawn from decades of watching what works.

Treat stock as cash, because it is. Every dollar on your shelves is a dollar you cannot use anywhere else. The single biggest cash flow lever in most shops is buying. Buy to sell-through, using your own sales data, rather than buying to the rep’s suggested order or to what you bought last year. Our POS software shows what is selling, at what rate, by supplier and category, so reorders reflect your shop and not someone else’s optimism.

Quit dead stock quickly. Stock that has not sold in six months is cash going stale. Discount it, bundle it, clear it, and put the money into lines that turn. The reports make dead stock easy to find. Acting on it takes discipline, and the retailers with the healthiest cash positions do it routinely rather than annually.

Know your cash rhythm weekly. Once a week, look at what came in, what went out, and what is due in the next fortnight. Fifteen minutes. The retailers who do this are never ambushed by a BAS payment or a big supplier invoice, because they saw it coming. Xero integration in our software keeps the accounting side current without rekeying.

Put GST and tax money aside as you go. It was never yours. A separate account you sweep weekly saves the quarterly scramble that damages so many small retailers.

Watch the seasonal calendar in both directions. Christmas stock is paid for months before it sells, so plan the cash dip as deliberately as you plan the range. Coming out of a season, mark down fast while shoppers are still in the mood. February is a terrible time to be holding December stock.

Chase the money you are owed. If you run customer accounts, invoice promptly and follow up without embarrassment. Our software manages debtors, statements and credit limits, and retailers who moved to systematic follow-up tell us they freed up thousands they had simply stopped noticing.

Build recurring revenue where your business allows it. Storage, locker rental, service plans and memberships smooth the lumps in retail cash flow. Recurring billing is built into our software and it is underused.

Mind the leaks. Transaction fees clipped from every sale, software add-ons, terminal charges: individually small, together meaningful. We do not take a percentage of your sales or charge per transaction, on any tier, and you choose your own EFTPOS provider. Check what your current setup costs across a full year, since the sticker price is rarely the whole story.

Be frugal in your capital spending. Is the planned investment in a shopfit necessary? Does the car upgrade have to be done this year? Is that piece of equipment really going to pay for itself?

Be frugal with the day to day? Are you paying someone to clean the shop? Are you paying for a bookkeeping service that, with AI, you could cover yourself today? Is you advertising spend bringing new shoppers in?

Be the asset. It’s easy to roster someone to work so you can have an easier day. That rostered hour costs real money and while you working the shop floor has a cost, it’s a different cost to paid labour.

None of this requires an accounting degree. It requires accurate data, a weekly habit, and software that shows you the truth about your shop quickly. If your current system makes any of this hard, that is a cost too.

What all this really comes down to is being frugal. Now that can sound negative. It’s not. It’s about leaving more cash in your bank, it’s about making you richer in and from your business.

We are glad to talk cash flow and show you the reports live. Book a demo at towersystems.com.au/pos-software-free-demo.html or call 1300 662 957 (AU), 0800 444 367 (NZ).