Whether your mandi business is small or big, it takes effort to run it smoothly. A commission agent can experience losses in business because of not following proper accounting processes. Not just this, if you don’t manage your cash flow properly, then someday it may lead to you not having enough money to keep your business operational. In mandi business, 70% of the transactions are cash only. You can now understand how important daily cash flow is for your business.
What is cash flow
Cash flow is basically the movement of money in the form of credit and debit in your business. Within the broader picture, it helps you understand the status of your business, whether you’re making a profit or loss. It is very important for mandi traders to manage their finance. In the mandi business, traders need to record every transaction in one place. They can then see their cash flow and the performance of their business. Irregular cash flow can be dangerous for businesses. When it goes unchecked, it can cause the business to shut down. Below we give you a few to keep in mind to avoid the problems that come with irregular cash flow:
1. Check customer’s payment
As a mandi trader, you will be buying commodities from suppliers and selling them to customers. It’s a very common practice in mandis to sell commodities on pay later basis. But it’s very important for you to take the payment back from them on time. Also, if someone does not pay you back on time, then you can avoid doing business with them or can apply charges on late payments. With these steps, you can ensure that you get timely payments and that your business runs smoothly.
2. Send timely invoices
In the mandi business, it’s very important to send invoices. It helps to maintain the professional relationship between customers and the commission agent. Therefore, send invoices at intervals of 15, 30, or 60 days as per your convenience. This will remind the customers that he needs to pay you for the commodities they bought from you on time.
3. Discounts for regular customers
If you have a customer who makes payments on time, then as a good gesture, you can give him discounts. This will keep the cash flow in good shape and also create a stronger bond with that customer. Discounts can also attract customers to buy more commodities from you and this will also help you in retaining good cash flow.
4. Take online payments
Today every small and big business accepts online payments. This is a fast and secure way of doing transactions. With cash, the tracking of every transaction can be difficult, but with online payments, it’s easy to track. You can instantly know if someone has paid you or not. This helps in keeping the cash flow of your business in check.
5. Get the right price for your commodities
If you know that you have the best quality mandi commodities in the market, then don’t hesitate to increase the prices. In the mandi business, it’s important to fix your prices for long-term benefits. Loyal customers will always pay a slightly higher price for quality commodities. This will be good for your business’s cash flow.
6. Pay the supplier first
While buying commodities from suppliers, always ask if they will give any discount if you make payment first. You can also negotiate the prices with him and hopefully, he’ll agree to your suggested price. If this happens then you can save a good amount of money on that order.
7. Manage business inventory well
Inventory management is one of the most important parts of mandi trading. This should never be ignored. Keep an eye on your inventory and analyze which commodity has the highest returns and which has the least returns. Try to sell the least profitable commodities with a little discount to sell them out quickly. Also after proper analysis, try to deal with only high-profit commodities.
8. Take care of customer satisfaction
If a customer does not like the commodity in one place, then he will try to avoid that shop. Also sometimes the behavior of business owners keeps the customers away. Always try to find the reason why your customers are not happy and try to fix them. In the mandi business, the satisfaction of customers is the most important thing. If customers won’t return to you, then how will you run your business? And if the business will not run then will you earn? So, always ensure customer satisfaction.
9. Always maintain an emergency fund
In difficult times, emergency funds come in handy to protect your business. No one is sure about what will happen tomorrow. If for some reason your business suffers a loss, then you should have an adequate amount of emergency funds to run the business for the next 5-6 months. This will keep the cash flow alive.
ChargeERP is the easiest, fastest, and most secure software that takes full care of cash flow and accounting for your mandi business. This platform is specially designed for mandi commission agents to record financial information related to sellers and buyers and to track their daily sales and purchases. ChargeERP also provides DEO services to the customers, i.e Data Entry Support at your business location. Try ChargeERP mandi accounting software and make the accounting of your mandi business easy.