How To Improve Cash Flow For Your Small Business
Cash flow is the lifeblood of any business. You need it to pay your bills and keep your company afloat. If you have too little cash on hand when a bill arrives, you may end up paying late fees or worse, losing access to an important service like electricity or internet. On the other hand, managing your cash flow can help give you confidence about how much money is coming in and going out over time. With this information in hand, you’ll be able to make smart decisions about what projects are worth investing money into now versus later down the road.
Make a plan.
To improve your cash flow, it’s important to have an understanding of what it is and how it works. Cash flow is the money that comes in from customers paying for goods or services you sell, minus the money that goes out for expenses like payroll and inventory.
Assuming you’re using a computerized accounting system (and if not, get on that), there are three ways to track your business’s cash flow:
- Know what kind of information your system provides about income and expenses. This includes accounts payable dates so you know when payments are due; account receivable balances so you know how much money is owed; cost of goods sold figures so you know how much inventory went out over time; etcetera ad nauseam ad infinitum…
Get up to speed on your cash flow and use the tools available.
You need to get a clear … More >>>