No matter what type of business you own or operate, there is one essential that is common to all—cash! That’s right. You need a dependable cash flow to keep your business operating smoothly, efficiently and at a profit. Here are three tips you may find useful as a small business owner to manage your cash flow problems.
Correct any billing errors
Errors in billing not only slow down payments you receive; they also can be a source of customer frustration, and neither is good for your business or for cash flow. If you are having cash flow problems, take a close look at your billing system and make sure there aren’t any errors that cause payment delays. Also, your invoices need to be sent to the customers early enough so that they have time to make “on-time” payments. If you are having a lot of billing problems, perhaps it’s time to seek out an automated system to handle customer invoices.
Manage your disbursements
While it is great to pay all your bills on time, paying every bill in full as soon as it comes due may not make good business sense when it comes to increasing your cash flow. Making payments in installments can sometimes free up cash that can be used to pay other bills, vendors or re-invest in inventory or other expenditures to grow your business.
Have a back-up plan
Emergencies are going to come your way. It is not a matter of if, but rather, when it is going to happen. There’s not much you can do to prevent some emergency situations. The best you can hope for is a cash reserve to fall back on. Money in the bank can take the sting out of the situation and let you focus on getting your business running at a normal pace again
Tushaus & Associates is a Certified Public Accounting firm, and can help you with journaling your transactions, reconciling bank statements, and compiling financial statements that will help you to keep any cash flow problems at bay. Give us a call at (414) 774-1031 to set up a consultation.
