Is your business constantly pinching pennies at the end of each month? Do you feel that punch in the face at the end of each pay period? Are you struggling to complete everyday operations? These are all common signs that it’s time to take control of your business’s finances.
While this may seem easier said than done, there are many simple fixes you can make to find and fix your cash flow problems before it becomes too late. Rather than sulking home at the end of a busy week, take some time at the end of your day to tackle these 6 financial tips that can help turn your business’s finances around in just a week.
1. Separate Accounts
Many business owners, especially small business owners and entrepreneurs, keep their income tied in with their business. This can be very detrimental to both parties. Separate your business’s funds from your own, so that you have a better idea of exactly how much profit your business brings in. Rather than keeping them connected, separating them will allow you to take some time to set a budget for yourself and your employees.
2. Set Aside Cash
Although you may not have much cash lying around, it is important to set aside whatever cash you can spare in your account. This will provide your business some cushion to fall on during leaner times.
3. Create & Review Cash Flow Reports
By creating and reviewing your cash flow reports, you will have a better idea of what is moving in and out of your business. Put your cash flow reports against your cash flow projection charts to give yourself an even clearer idea of what your business’s finances really look like. It will give you more accurate numbers for spending, profits, and other overall expenses that your business will incur in a single quarter.
4. Analyze Your Spending Habits
As you are taking a look at your cash flow reports and projections, analyze your spending habits. Is there anything that can be cut? This may not be a decision you can make on your own. Gather your team or managerial staff to come up with a plan of action to clean up spending habits.
Take a look at all realms of your spending habits. This can be anything from excess inventory, a luxury service, or even your eating habits. Rather than taking your hard working team out of the office for lunch, swap it out for a team potluck. This will not only save you some extra cash, but it will help build company culture.
5. Get Invoices Paid
Many customers take advantage of businesses with invoice-based work. They take their time paying you for your services, which is the main cause of poor cash flow. There are many ways that your business can get its invoices paid faster. Take a look at your accounts payable spreadsheet for any delinquent invoices. Start chasing those clients that have not paid by using polite reminder phone calls, letters, emails, or whatever works best for your business.
6. Seek Alternative Financing Options
When you are looking for a fast way to get cash for your business, there are many alternative financing options that can help. Seeking financing through a factoring company will help your business get cash for outstanding payments. A factoring company will purchase your business’s outstanding invoices or accounts receivables to give you up to a 96% cash advance in just 24 hours or less. With a factoring company, they will take on the burden of collections to ensure that you get your hard-earned money. Unlike banks, factoring companies give you financing at the lowest rates to ensure that your business is getting the funds it needs, at the right price.
If your business is struggling to make payments this month, try out these 6 tips. Not only will they allow you to see your business in a larger sense, but they will also help turn around your finances in just a week.