Your small business’s cash flow is the centerpiece, the key variable, the heartbeat of your company. Managing it can be a challenge for some entrepreneurs. The important thing to remember for cash management is that a little creativity and planning ahead can really smooth out bumps in the road.
Read on for some helpful tips on how to do so.
1. Spread Out Payments
Some electric, oil, and insurance companies offer helpful grace periods for those months when you really need to hold onto that extra cash. You should take advantage of this when your business’s cash flow isn’t exactly where you want it to be. So split your monthly expenses into two categories—the group that must be paid on time, and the group that has a little leeway. For the group that must be paid on time, failure to meet deadlines could really hurt your business and affect your ability to operate it smoothly; these payments include utility bills, taxes, and payroll.
2. Don’t Make Assumptions on Future Revenue
Don’t make payments on money that you hope to gain from sales in the future. This could put you in a precarious position, should you fail to meet expected sales. Only make payments with the money you know is already in your bank account.
3. Adjust Payroll Schedule
Some companies have veered away from traditional weekly payroll schedules to instead adopt bi-weekly or even bi-monthly schedules, depending on the purpose of the business, the business’s cash flow, and other various factors. If your business has trouble meeting weekly payment schedules, but could tolerate bi-weekly, monthly, or bi-monthly schedules instead, look into the state laws of your area to see if this could be an option.
4. Stay Informed
As an entrepreneur, it’s inevitable that you have many tasks to fulfill and many hats to wear on a daily basis. Despite a hectic everyday schedule, entrepreneurs need to make cash flow a top priority. Take time once a week to closely examine your small business’s numbers, to make sure there are no errors and that sales are doing well. By staying on top of your finances, you can avoid last-minute panic in case something goes wrong.
If you have cash flow issues, a Biz2Credit financial expert can help. Call 877-861-2210 or visit Biz2Credit.