Making the Most of Your Cash Flow

Making the Most of Your Cash Flow
Business slows down, what do you do? Most will panic! Instead, be prepared. Now is the time for you to maximize the effectiveness of how you manage your cash flow.
Here are a few ideas on how to manage it:
1. Use your Financial Reporting Tools – whatever you use to keep track of your income and expenses make sure the program allows you to run reports to help you analyze the ebbs and flows of your business sales. Make note of the times of the year or month that your cash may be affected by sales.
2. Improve your process for making payments. If you are not already paying your expenses online (online bill pay) then consider it. In addition your payroll should be online and immediate tax payments to make it more efficient. Using online banking allows you to have a real cash flow insight into your business.
3. Accelerate your collections of payments. One thing that would help with cash flow is to streamline your systems for collections. The days of relying on traditional deposits processes are almost over. If you aren’t allowing your customers to pay via credit cards, I would highly recommend it.
4. Invest your cash wisely. When you do have extra cash, have your checking account sweep into a money market or do occasional transfers to earn interest!
5. Make a Backup Plan! Yes that means creating a credit line that you can access in case of a cash crisis. Do not run your business on a credit line. If your startup costs are in the crdit line, get those paid back as soon as you are in the Black!