Beyond how much money you have in the bank, the financial health of your business is determined in large part by your cash flow. How money regularly moves in and out of the business plays a much bigger role in long-term success than simply being able to make money off your customers. So, here are five tips on how to improve your cash flow to keep your small business going strong.
Make sure you’re tracking it
The most important step that you must take first is setting up the accounting software that helps you track your cash flow with minimal work. There are a lot of small business accounting tools, many of them free to some degree, or at least offering a free trial. You can input your regular monthly expenses and make it easier to input new incomings and outgoings, so you have an easy-to-see representation of your cash flow at any point, helping you identify costs that can be cut.
Review your costs monthly
It’s not enough to glance at your cash flow occasionally, you should go through a full review more frequently. Using your accounting software, generate reports on profits, loss, inventory management, balance sheets, and accounts payable and receivable. Identify the costs you can afford to slim down and be aware of which costs might have to grow in future and how you can make room for them.
Speed up the payment process for customers
Depending on how your business operates, you might spend more time than you should waiting for payments to come in, which can result in having much more in your accounts receivable than your actual income, which can make it harder to manage new investments and debt repayments. Consider offering more payment options such as accepting credit cards, ACH payments, or digital payments like through PayPal. If you’re using invoices, consider invoice factoring software that can help you track payments you’re waiting for an automatically send reminders when the time is right.
Replace big upfront costs with smaller monthly payments
There are a lot of investments you need to make into your business but bearing the brunt of all those costs head-on can leave your cash flow in a sorry state. Instead, consider using services that offer monthly payments to keep costs manageable and predictable. CurrantWeb can help you do that with our pay monthly website service, which helps you establish the professional looking, user-friendly site your business needs, without having to take a big chunk out of your budget all at once.
Make sure payable and receivable payment terms match
If you send invoices to clients and customers or they pay regular bills, then try and match up the terms of those payments to the terms you follow with your own accounts payable, be they supplier costs or loan repayments. For instance, if you pay your supplier every 30 days, have customers pay every 30 days instead of every 40 days, so there isn’t too large a gap between when you have money coming in and when you have money going out.
Start implementing the tips above and get in touch with Currant Web to learn more about pay monthly website service, streamline that cash flow, and offering real security to your business’s finances.