How to Maximize Business Cash Flow
In order to stay in business for the long haul, owners of businesses of all sizes must have more cash coming in than they have going out. But it’s not just that simple. You’ve also got to have enough cash on hand to pay for all your bills, every single time. If you don’t, debts start adding up and, before you know it, you business finances are out of control. Even if you are netting a profit, your accounts receivable and your accounts payable need to be balanced. The infographic below has a lot more details.
There are many techniques to improve efficiency with your accounts payable. Some of your clients may offer you a discount for paying early. If they do, and you have the cash in the bank, by all means go ahead and pay the bill and enjoy the savings. Automate this payment to take advantage of this savings every payment cycle. If they don’t offer such discounts, just hold on to the cash. Also consider automating all payments on a single company credit card. This way you can rack up benefits for your business, while always being sure that your payments are being made, no matter how much you have in the bank. Always make sure to pay off the balance every month. Don’t go month to month with large balances, or this strategy will quickly backfire.
You’ll see a lot more techniques in the infographic below. Making a profit isn’t rocket science, but it’s an ability that eludes many business owners. In order to do it yourself, you’ll always have to make sure you have more than enough cash to pay off your creditors. This is the essence of cash flow, and it’ll keep your business afloat for many years to come.
Consider small business loans from Citizens Bank