Cash flow is the lifeblood of a business, and if it slows down or trickles to a stop, that can be bad news. A good flow of cash ensures your business can take advantage of growth opportunities, commercial financing options, or weather tough economic times. Instead of waiting for things to work out on their own, it is time to take matters into your own hands. Here are three ways to help your business maintain a healthy bottom line with a good flow of cash.
Get Payments Early
Depending on what your business does, it can be easy or difficult to get early payments. For example, a shipping company can offer a discount when customers pay early and penalize anyone who pays late. Other companies can use this model to make sure they’re paid quickly, thus improving overall cash flow.
Other ways to get early payments are with minimum deposits and down payments. This can be a small percentage of the total bill that can help you purchase materials for the work. Doing this with large orders can also protect you in case an order is canceled and you have already begun work on the project.
Cut Your Expenses
If you already get a good flow of cash from your customers, but it flows out faster than you can easily manage, then it is time to take a good look at your expenses. Start with your bills and see if there is anything you are paying too much money on.
For businesses that use heavy machinery, one way to save money is to lease equipment rather than buying it. Equipment leasing can save money by allowing you to pay for equipment only when you need it. You can usually save on insurance this way, too. By cutting unnecessary costs, you can improve your cash flow.
Hire a CPA
An accountant can usually look at your books and gain more insight than you can on your own. Investing in a CPA is a good way to save yourself time and money. You save time by delegating this task, so you can focus on running your business. You can save money since CPAs can usually find you enough savings to cover their fee.
Cash flow is an important part of keeping your business afloat. By accepting early payments, cutting costs and hiring a CPA, you can see improvements in your overall flow of cash. These three steps are a good way to secure your business’s financial future.