5WAYSTOIMPROVE CASHFLOW MANAGEMENTIN SMALLBUSINESSES
Oneofthetoughesttaskssmallbusinessownersmustperformismaintaining astablecashflow.RecentresearchfromIntuitindicatesthat61%ofbusinesses encountercashflowissuesglobally.Inaddition,ithasbeenhighlightedthat poorcashflowmanagementcontributestothefailureof50%ofsmall enterprisesintheirfirstfiveyearsofoperation.Soletusunderstandwhatcash flowisandhowtosolvecashflowproblemsinasmallbusiness.
1. Verify That Your Books Are Updated: Onecommonbookkeepingmistakemadebysmallbusinessownersisfailingtomaintain updatedbooks.Makesureyourbooksareuptodate.Ifyoukeepyourrecordsuptodate on a regular basis, you may use them to monitor the movement of cash through your companyand,ifnecessary,giveacompletepictureofitsfinancialstatus. If you lack confidence in numbers, hire a qualified public accountant or outsource your bookkeepingrequirementstoathird-partyorganization. Here are 5 ways to improve your cash flow management
2. Quick Receivables Recovery: Acceleratingreceivablescollectionisoneofthefinest waystomanagecashflow.Thefollowingtechniquescan beusedtoquicklyrecoveryourreceivables: Beashonestasyoucanwhilemakingpayment arrangements. Sendoutinvoicesrightaway. Givecustomerswhopayontimediscountsorother incentives. Provideanumberofpaymentalternatives.
3. Optimize Accounts Payable: Makepayingthebillsmorestraightforward. Createarelationshipoftrustwithyoursupplierssoyoucantalk tothemaboutpaymentconditions. Regularlyexamineyourspending Automatethebuyingprocedure. Inthepast,itwasrecommendedtoreceivemoneyassoonas possibleandtopostponepayingbillsoutofyourownpocketaslong asyoucould.Deloitteassertsthatpostponingpaymentscanharma business’connectionswithitssupplierssincetheybecomeless willingtohelpwithproblems,respondtoquestionsslowly,andhave stricterpaymentterms.Delayingpaymentsovertimemaybe harmfulasaresult. Businessesmusttakethefollowingactionstomaximizeaccounts payable:
4. Utilize Technology: Usingtechnologyasatoolcanhelpyoumanageyourcash flowmoreskillfully.Throughtheuseoftechnology,all operationsinvolvingcashtransactionscanbeconsolidated intoasinglesystem,makingiteasiertokeeptrackofcash inflowsandoutflows.Real-timeinformationwillmakeitsimpler tospotanywarningsignalsandtakethenecessaryaction beforeissueshaveanegativeimpactontheorganization. Sincespreadsheetsandpaperledgersarenolonger necessary,theywillhelpyouovercomecashflowforecasting challenges.
5. Maintain a Cash Reserve As a Backup: Incaseofunanticipatedemergencies,keepacash reserveonhandandmakearrangementsinadvanceto meetthesecosts.Ifyourrecordsareaccurate,itwillbe simplertodetermineyourliquidassetsandtheexpenses youcanwriteoff. Keepingahighcreditscoremakesiteasiertoobtain short-termbusinessfinancing.Youcanraiseyourcredit scorebyusingcompanycreditcardstopayfor emergencyfunds.
HOW CAN WE HELP? Regardlessofthesizeofthecompany,cashflowisits lifeblood.IBNTechisanindustryexpertwell-versedin cashflowmanagementtechniques.Getintouchand understandhowyourbusinesscanbenefitfromthese services.
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