New Year, New Opportunities for More Cash
Happy New Year! We made it to a new decade! If you’re anything like the 100 million Americans who made a New Year’s resolution, you’ve probably created a robust list of personal goals or commitments. Eat healthier, lose weight, learn a new skill, take a trip… While you were making your personal resolutions, did you think about your professional or business resolutions, too?
If you’re a small business owner, it’s important to make resolutions for your business as well. It’s easy to get caught up in closing out the previous year and not thinking much about what you need to change in the coming year to improve your business, or just stay on track.
Therefore, one area that is especially important to review and adjust as the new year begins and tax season approaches is your cash flow! Cash flow is the money that is moving in and out of your business in a month’s time. Reviewing monthly cash flow can be eye-opening! It gives you an opportunity to evaluate your cash reserves and cash influx as you consider growing your business, or riding out slower times of year.
8 Cash Flow Resolutions to Kick Off 2020
1) Review Your Accounts Receivables – Take a look at your invoicing. Send out new invoices immediately and have a process to check in on whether they’ve been received or where the customer is in the payment cycle.
2) Extend Your Payments – Alternately, the antithesis of collecting receivables, discuss your payment terms with suppliers. Extend your payables to have more cash on hand, but watch how much debt you carry at any given time and don’t miss payments!
3) Offer Discounts – Everyone loves a win-win! Offer discounts for early invoice payment. Your customers will appreciate it and your cash flow will certainly benefit.
4) Ditch Slow Moving Inventory – If you have inventory that doesn’t move as quickly as your top movers, look at ways to get it out the door and off the books. Offer discounts on the product or discounts on shipping to attract customers. Or get creative by bundling with a popular product or offering a BOGO (Buy One Get One).
5) Explore Increasing Prices – Review your pricing structure to determine if there is an opportunity to raise prices within reason to stay competitive or combat wage increases.
6) Shop Around – Big or small, business expenses can add up and have a direct impact on your cash flow. Review your supplies and vendors annually to ensure you’re getting the best deals and paying fair prices for office supplies, rent or utilities. Review insurance providers or even banks for better interest rates on your accounts.
7) Explore an Office Side Hustle – Review opportunities to add some revenue streams right under your nose. Sell old or unused equipment, or rent out empty office or storage space.
8) Explore Tracking Tools – Consider using an online cash-flow management to help anticipate your monthly inflow and outflow of cash. Float, Pulse, and PlanGuru come highly recommended as easy to use, low cost options that can also sync with Quickbooks or other accounting software programs.
Chances are you will find a few areas to make changes that will improve your monthly cash flow. Create reminders to regularly review your progress throughout the year. Primary Funding can also help with your 2020 cash flow resolutions. Give us a call and we can evaluate your needs. You’ll be sitting on a nice pile of cash reserves by 2021!