If you want your ecommerce business to run smoothly, you need good planning. It is also important to ensure financial protection of measures and strategies in order not to lose track of your cash flow between ordering materials, producing goods and handling the sales process. In this blog post, Shopware Technology Partner Agicap gives you 5 tips for secure liquidity planning.
1. Always keep an eye on incoming and outgoing payments
Make it a habit to check on your business accounts regularly. This should be the number 1 priority for your liquidity planning, because it is only by knowing your income and costs for each month that you can estimate how your liquidity will develop in the future.
It is best to create a liquidity table for the last six months of your business. If you go back several months, you will recognise recurring patterns (especially in your monthly costs), which will then make it easier for you to make estimations for planning.
You can enter your outgoings and incomings for each month in the table. If you then subtract the outgoings from the incomings, you can see exactly whether you have positive or negative liquidity at the end of the month.
To make sure that the table does not become too confusing, you can combine the individual incomings and outgoings into categories, for example like this:
|+||Payments by customers in your online shop||-||Fees for sales platforms|
|+||Payments by customers on other sales platforms (e.g. Amazon or eBay, list these separately, then you can also see how much you turn over on each platform every month)||-||Fees for software licences|
|+||Cash payments (if you have a physical shop)||-||Personnel costs|
|-||Cost of materials|
In your business, you may have other costs or sources of income, so you should consider this list only as a rough guideline. The most important thing is to take into account all incoming and outgoing payments in your__ liquidity table__, because this is the only way to create a crystal-clear overview for yourself.
2. Regularly check and optimise costs
Closely linked to point 1 is routine cost checking. Your liquidity table will also help you with this. This is often when entrepreneurs see for the first time what they are spending their money on. It is not uncommon for points to be identified where the company can make savings.
Saved costs have an immediate positive effect on your liquidity, because all the money you save gives you a surplus that you can invest elsewhere in your business.
Depending on the cost structure in your company, there are various starting points for optimising expenditure. For example, if you break down your income and expenses separately for each sales platform in your liquidity overview, you can see how platform fees relate to your turnover there. Maybe there's a platform where you don't make significant revenue and the fees aren't justified.
Have your supplier's delivery prices increased recently? Get quotes from other suppliers, or perhaps it may even be cheaper to buy direct from wholesalers.
3. Plan realistically
Some entrepreneurs plan too optimistically. Positive thinking is good for morale, but in__ liquidity planning__ it quickly leads to losing sight of reality.
That's why you should be honest with yourself and look at what realistic sales you are likely to have in the coming months. When the market is saturated and customer demand is declining, it does you no good to rely on the principle of hope and assume higher revenues in your liquidity planning.
Keep a close eye on the market and the industry you are in. From this, deduce what your income and costs will be in the coming months. Are commodity prices exploding? Are there supply problems with certain products? All this affects your income and expenses.
Always keep an eye on the market and the industry to identify changes that affect your incomings and outgoings in time.
4. Recognising warning signals and opportunities
Once you have created a liquidity table for the last few months and projected your expected income and expenses into the future, you can see in black and white how your liquidity is developing.
In liquidity planning, you can see in advance whether you will have to reckon with a liquidity bottleneck in the near future. For example, if you expect customer demand to decline in the next two months, this will be reflected in lower revenues. Will you still be able to cover your costs? A look at the table will answer this question.
Liquidity planning is therefore an important early warning system that gives you more time. By seeing a few weeks in advance that you will have liquidity problems, you can take countermeasures and ease the bottleneck or avoid it completely by taking appropriate measures.
Liquidity planning not only shows you risks, but also opportunities for your business. If you expect high customer demand in the near future, you will generate more surplus liquidity. If you are able to see this in advance, you can plan investments better. Perhaps you prefer to build up reserves with the surpluses or invest part of the income in the capital market – depending on what the financial structure of your company requires at the moment.
5. Use digital tools for liquidity planning
Creating a liquidity plan takes a lot of time if you maintain a table manually. Nowadays there are digital tools like Agicap that make your work much easier. This liquidity planning software automatically connects to all your business accounts and retrieves all transactions from there.
You sort them into categories once, and recurring transactions are then automatically filed in the correct category. The software also updates your liquidity plan every time you retrieve it, so that you can take a look at the current data every day.
With liquidity planning software, you can also create different scenarios and simulate, for example, what happens if customer demand drops drastically. Then you will know how long you can keep yourself afloat using your reserves and you can be prepared with a plan B of what you want to do in the event of a liquidity bottleneck.
Instead of spending a long time manually entering data, you can retrieve your liquidity plan at the touch of a button. This leaves you more time for the important things: making decisions for your business so that it will become even more successful and can also survive difficult times.
Conclusion: Always keep these 5 tips in mind when planning liquidity
About the author:
Dr Nirmalarajah Asokan is Senior Content Marketing Manager at Agicap in Berlin. He is active in the areas of liquidity management, cash flow and financial planning.