Our tips for optimal cash management

What can you do right now to get more control over your cash flow? How can your borrowings add value to your activity? Which loan is best suited to achieving your goals? Charlotte Ballegeer is an expert in helping SMEs, but her tips are also useful for self-employed individuals and smaller companies. Her knowledge of the business world and her advice on cash management are invaluable.

Why consult an expert? "Keeping your cash flow under control is a major challenge"

"The cash position of your business is constantly changing. Money comes in when your customers pay you and goes out when you pay your suppliers' invoices. You already know that having your cash flow is under control gives you the peace of mind you need to focus on your core business. It means that you’re not depending on payments from your customers in order to pay your own invoices or your employees. We have solutions that help you cope with unforeseen circumstances or an occasional large item of expenditure. In other words, to help you anticipate the future and develop."

Changes in customer behaviour

"The average payment time of a customer in Belgium has increased from 50 to 60 days in recent years. This is a clear trend that applies to individuals, businesses and institutions. It's a change you need to take into account when managing your business. Fortunately, there are various solutions available. They can help you cover temporary liquidity shortages, finance your projects, and protect you against non-paying customers. I can give you a clearer view of the many options."

Digitalisation: a big advantage

"Digitalisation is extremely useful in cash flow management. It gives you a better overview of your cash flows, income and expenses. With the data available today, you can go further in terms of optimising your position. You can also take some loans entirely online. For example, to finance the purchase of a car or to cover your employees' holiday pay without affecting your working capital. You save time and money, and you reduce application fees."

Different types of credit to keep a balanced cash position

"It's essential to understand the differences between the following three types of credit, which can each help finance your business in their own way. An overdraft is a short-term form of credit that’s reusable. It's linked to your current account and gives you the flexibility to cover recurring fluctuations in liquidity. A straight loan has a similar purpose, but for larger amounts. An instalment loan is used to finance a specific investment or a specific cash need. You repay it monthly, with a fixed interest rate."

A solution for managing your invoices

"Juggling with delayed payments from your customers is not always easy. That's why we developed Easy2Cash*, a factoring solution designed specifically for SMEs, allowing you to pay your suppliers and employees on time. You send us your outstanding invoices, and we pay you the amount your customer owes you immediately. We then take care of collecting the money and even cover unpaid invoices."

Microcredit: an attractive alternative

Do you have plans to start your own business or did you start it less than a year ago? Are you unable to take out a traditional bank loan to finance your project?

Our partner microStart** can offers you a microcredit of €500 to €25,000 to start your business. Its experienced coaches can support you, helping you start, manage and develop your business activity. They can also help you create your business plan.

A microcredit is a viable plan B if you can’t take out a traditional bank loan. It's fast, simple and flexible. However, the interest rate is higher than the current market rate.

Our expert's three main tips

Create a cash flow plan

"That's often my first tip: do some forward planning for your cash flow. Think ahead and make a list of the income and expenses you expect throughout the year. If you've done this exercise properly, you'll know which months are the most challenging. Try to be as realistic as possible and take into account average payment delays, for example. It's not a problem if you forget an item or if one of your estimates is incorrect. A slightly less accurate evaluation is still useful and allows you to refine your estimates for the coming years."

Choose the right type of credit for the right purpose

"When it comes to credit, it's essential to distinguish between short-term and long-term financing. Overdrafts and straight loans are typically short-term forms of credit designed to cover your cash flow cycles, to bridge the gap between making payment for inventory and receiving payment from a customer. Don't use them to finance a project or purchase over a longer period: for example, for a car or an investment. That’s because a short-term form of credit is not only more expensive, but if you use it for a longer-term purpose, it will no longer be available when you need it, for example, to cover a temporary liquidity requirement."

Seek advice from an expert

"Don't leave managing your credit and cash flow to chance. If I had to give you just one piece of advice, it would be to seek guidance from a real specialist. At BNP Paribas Fortis, we can put you in touch with an expert in liquidity and credit management who will act in your best interests. They will always start by looking at your projects, goals, and situation in order to offer you the right options. They will show you simulations and explain how to protect yourself against certain risks. Discuss your needs with one of our advisors and turn cash flow management into a real advantage for your business!"

How to gain control over your cash flow?

Ask an expert for advice about optimal cash flow management.

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*Factoring company: BNP Paribas Fortis Factor NV/SA, Warandeberg 3, 1000 Brussels – VAT 0414.392.710. Subject to acceptance of your application. This document is information for business clients, not an offer or promise of credit.

**MicroStart cv & MicroStart Support vzw, De Fiennesstraat 77, 1070 Brussels. MicroStart cv: BE 0829.081.071 and MicroStart Support vzw: BE 0835.911.059 – RPR Brussels. Subject to acceptance of your application. BNP Paribas Fortis nv holds a stake of more than 10% in MicroStart cv.