Tips on Keeping Your Cash Flow Moving as a Small Business

Whether you’ve been in business for one year or ten, bring in £500 per week or £500,000 per month, your business relies on cash flow. You can’t just spend everything you make; keeping your bank account in the green is an art form. Fortunately, it’s one that doesn’t require extreme creativity, just attention to detail and a willingness to put in the hard work. Here are a few tips, brought to you by Eazitax Group to help you keep your accounts where they need to be so that you can run your business without financial worries.

Work with your financial advisor.

If money management isn’t your strong suit, you might want to consider bringing in a helping hand. Look for a financial advisor or a good accountant that can help you understand how your money situation looks now and how it might in the future. Either ask for recommendations or look for a qualification but do your research first. A quick search of your consultant of choice should reveal lots of happy customers. You also want to make sure to get their cost in writing along with a list of services they provide for this fee. A good accountant should help you set up an internal financial system to keep you in good stead.

Monitor ongoing spending.

Do you know how much money you need in the bank each month to keep your business moving? If not, it’s time to look at your ongoing spending. This should include everything you consider overhead, such as utilities, rent, inventory, professional services, and payroll.

Anticipate large purchases.

All businesses have to make a large purchase now and then. Make sure that you are aware of what might be coming down the pipeline in the next three to six months, and do what you can to ensure that the cash is available for these. It might also help to look for ways to lower costs on your large purchases. American Express suggests negotiating with suppliers and cutting down on nonessential services. This allows you to funnel money into other aspects of your business.

Establish a line of credit.

Ideally, you’ll never need to use a line of credit. However, it’s not a bad idea to have an accessible cash pool if you need it. While it takes time to build your business’s credit, once it’s in place, it’s a safety net that can help ensure you can pay your employees and cover unexpected expenses without hurting your business’s ability to satisfy your customers.

Avoid late fees.

Just as you’re trying to pay attention to your cash flow, so too are your suppliers. Because of this, they likely charge late fees on unpaid invoices. Patriot Software explains that late fees vary; however, when you have a large invoice, even a 2 percent late fee can add up, especially if you have multiple each month.

Stay one step ahead of receivables.

While you do not want to pay late fees, it’s not a bad idea to charge them. Eazitax accounting also suggests offering a small discount to customers that pay quickly. This might encourage them to pay faster, which will keep your accounts full.

Cut costs.

Finally, look for ways to cut costs. This might be moving to a guerrilla marketing strategy or doing an energy audit on your business to see how small changes to your processes and infrastructure might lower your overhead expenses. If you plan to cut please, proceed with caution. It is almost always better to temporarily cut out extraneous benefits, such as free lunches, than it is to get rid of employees altogether.

Your cash flow should move like a river: never ending with only the occasional drought. By keeping your money coming in on time and reducing the amount that you pay out, you’ll have cash on hand for when you and your business need it most. When you are a small business, every dollar matters and every cent counts.

If you’re still looking for ways to take control of your business, contact Eazitax Group today. Call 020 8529 2600 or email info@eazitax.co.uk