Chat with us, powered by LiveChat
SHARE
print this
Print This Page

How to Analyze Your Business’s Cash Flow

Businessman working with virtual touchscreenIs your business struggling with poor cash flow? If you answered yes, or can’t come up with an answer for this question, it’s time to start analyzing your business’s cash flow.

If you are struggling with cash flow, not only is your business’s credit at risk, but also its reputation. Don’t let your business suffer from cash flow problems when it is so easy to fix. Start tracking your business’ cash flow today with these four simple steps:

Track Incoming Cash

To start tracking your business’s cash flow, take into consideration your incoming cash. This can be from clients, sales, or even investments. Because your business is most likely contract-based, you will be waiting for payments to come in from outstanding invoices. This may require making some estimates. Of course, no estimate is entirely accurate, but make sure that they are close enough to actual sales that your business would make. This will help you get the most accurate sample of how much your business is bringing in.

Track Outgoing Cash

After you have taken account of your incoming cash, you will need to track outgoing cash. This will help you better understand what your profits are being spent on, what to cut, and where to invest. Take into account business related expenses like new software, office furniture, vehicle maintenance, etc. Also, take into office expenses account payroll, office supplies, utilities, billing, and more. Be sure that your outgoing cash is tracked according to your business’s schedule, whether that be monthly, quarterly, or annually. Be sure to also factor in taxes!

Analyze Your Findings

Of course, you would want to have your incoming cash be more than your outgoing. If you believe that your assumptions are accurate and your results come up with more out charges than incoming profits, it’s time to come up with a plan of action. Use these two documents to help plan purchases, save, and invest.

Make Financial Adjustments

After you have taken a deep look into your finances, it’s time to make financial adjustments. If your cash flow is poor, don’t get discouraged. There are many financial options that will allow your business to take control of its cash flow for good. Two of the most used financial options would be using cash flow loans or invoice factoring. With cash flow loans, your business will be able to secure a large sum of cash to its capital in the form of a contracted loan. Invoice factoring is the process of selling your outstanding invoices to get up to 96% cash in advance in just 24 hours or less. Both of these financial services can be very beneficial for businesses with both strong or poor cash flow. The funds that you receive can be used to boost clientele or save you in a time of need.

Tracking your incoming and outgoing expenses should be something that you constantly analyze for your business. We hope that you have greatly benefited from these four tips to keep your cash flow secure and strong.

business factors email subscribe-01

Get started now. Apply online
Or call us anytime 24/7 at 800-672-3844.

Se Habla Español

About the Author:

Robert Bernfeld started in the commercial finance industry in 1974. His early years included positions with Aetna Business Credit and Foothill Group. During the next thirty five years. Mr. Bernfeld established both equipment leasing and accounts receivable factoring companies. He partnered in founding Business Facilitators, Inc. in 1999. Mr Bernfeld graduated from the University of California, Riverside in 1974 and received his Juris Doctorate from Loyola University School of Law in 1977.

View More Posts By Robert Bernfeld