Business cash flow can be a great metric for business performance, as successful cash management will keep your business running smoothly and open more opportunities for growth and expansion. By keeping tracking this metric, you’ll not only be able to see the fluctuations between expenditure and revenue, but you’ll be able to piece together a clear picture of the overall state of your business. This Balboa Capital blog post discusses three ways to improve your business cash flow so you can maintain a healthy bottom line.
Reduce your expenses.
Reducing expenses is a good place to start. Make sure you aren’t wasting your money on brand new equipment. Leasing equipment is a great way to save some money without sacrificing quality and capability. If you’re looking to purchase used equipment, search local advertisements for equipment for sale, targeting companies that may have recently gone under and are liquidating their assets.
Push for early payments.
Start cashing in on those outstanding accounts receivables. Offer incentives to customers who pay in advance by offering a cheaper or discounted rate, and make sure there are penalties in place for late payments. Your customers will be more likely to pay on time, if not early, and your bank balances will skyrocket. As an additional option, you can require your customers to pay a minimum deposit on any large orders. This gives you a portion of the accounts receivable up front, and still allows for early payment incentives to be put into place.
Work with an accountant.
Working with an accountant should be viewed as an investment rather than an expense. An accountant has the skill set needed to review expenses and revenues, while providing insight you would not otherwise have. An accountant will also help you anticipate, avoid and plan for future cash flow problems. When choosing a business accountant, look for one who has experience in your industry. Financial flexibility is important to companies of all sizes and can help protect you from any unforeseen expenses or problems. With the tips above, you can build up your bank balances and keep your business operating as efficiently as possible.