Let’s talk business – small business cash flow, that is. Cash flow is the life blood of any business, no matter the size. The issue is that small businesses need to be more sensitive to their cash flow. With years of business experience as business trainers, consultants, and accounting out-source specialists we have developed a background of knowledge about good habits and ones to avoid. Here are some small business cash flow tips to help you grow your business profitably.
- Understand that you don’t necessarily have to have a brick and mortar location. All too often a business doesn’t necessarily need to have a brick and mortar presence. With today’s technology, it is possible to work remotely in a number of service or consulting industries.
- Consider outsourcing your back office needs. Again, with today’s technological advances it is possible to have your bookkeeper, marketing team, even your receptionist, working from a remote location. Understand, when you hire staff that you are housing in an office environment, your are adding an element that will make profitability more of a challenge.
- Do NOT carry receivables. It is imperative that you collect payments from your clients/customers in order to have positive cash flow. There are other elements to this key concept, but the primary building block for this is to ensure that your customers are paying you in a timely fashion. We recommend that you accept not only checks, but also credit cards. This flexibility in payment options will often speed up your collection process. On the day of service or delivery of products you can either have them pay you by check or you will process with a credit card that you have on file.
- Negotiate with you suppliers. Often times you can negotiate better pricing by simply asking, purchasing with cash, volume purchasing, etc.
- Pay yourself – this is often a difficult concept for small business owners to understand. You need to ensure that you are taking care of yourself, so that you can take care of your business.
- Know your financial position. It is imperative that you keep your finger on the pulse of your business. A business owner doesn’t need to become an accountant, but finding a partner that can help them understand a couple of key reports can go a long way to helping the business owner understand the financial health of their business.
RPPC, Inc offers a myriad of services in bookkeeping and accounting outsourcing as well as having the professional staff to help an entrepreneur understand their financial picture.