Managing finances and ensuring the profitability of your company are usually the top priorities you face as a business owner. Sometimes it can prove to be a real challenge when you’re balancing all the aspects of your business. Continue reading to find 5 simple tips to help improve your company’s cash flow:
1. Look into the Future. Anticipate reasonable projections and all the upfront costs associated with running your business. It’s important to get a good understanding of your business and its financial needs early on. Are your business costs going to be greater than your company’s income for a few months? Keep a realistic pipeline to help you forecast your financial needs.
2. Avoid Needless Spending. Unnecessary expenses can really be inhibiting to cash flow goals. Make sure you, and your employees, adhere to budget standards and approved expenses. Consider using expense reports to help manage expenses. Find a free expense report template by clicking here.
3. Consider Factoring your Invoices. It’s an inevitable fact of business that you will have a few slow-paying customers. There is a proven solution called factoring that allows you to get upfront cash so you don’t have to wait 30-60 days for a payment. A factoring company essentially purchases your invoices so you can get immediate cash to use for upfront business costs. Many factoring companies allow you to choose the customers you want to factor, giving you the financial control you need to run your business.
4. Or Consider a Working Capital Advance. A Working Capital Advance is similar to factoring, except that you get your advance before the work is completed. This option is great for B2B or B2C companies that accept credit cards and generate receipts. It’s a simple way to get the capital you need to grow your business.
5. Plan for Seasonal Changes. Know your business and when the seasonal peaks and dips occur. This will help you plan your year to ensure you have the cash you need to run your business. If your busy season is summer, keep a portion of money aside during those months to help fund for the slower months throughout the rest of the year.
6. Take Advantage of Loyalty and Savings Programs. Many companies offer loyalty and discount programs for everyday business expenses such as office supplies and fuel. For instance, Staples has a Staples Rewards Card that offers 5% back in rewards and instant savings on copy and print services. At eCapital, we offer a Fuel Card that provides instant savings at the pump. Small savings like these can really add up to considerable savings in your bank account.
Continue to check back on our blog for more tips and info on how you can improve your company’s cash flow!