Here's the good news: Your company is growing. Record sales, better quarters — it's all happening for you now. But there's one area where you could improve your financial groove, and it's called cash flow. Why not use this handy checklist to ensure your growing company is growing financially as well?
Establish an Evaluation Schedule
If you haven't set up a regular financial evaluation schedule for your company, now's the time to put that practice in place. If you want to avoid surprises, try a quarterly cash flow review schedule. Be sure to evaluate each cost center individually, and see if there's one in particular that's dragging your flow down.
When reviewing cost centers, make sure you're accounting for the fully loaded costs for all the services and products you provide. For example, rather than simply counting how much cash you pay each employee per hour when considering labor costs, be sure to include their benefits and employment taxes. You might be setting prices incorrectly or missing opportunities to streamline costs.
Seek Cash Infusions
Should you find you're in need of cash to tide you over during lean times, don't fret. There are plenty of options.
Lines of credit allow for cash to be ready and waiting for you when you need it. Speak with your business banking professional about how you can qualify for and set up a line of credit.
There are also receivables-based solutions where you can be advanced or loaned money against your outstanding invoices. Your banking professional or a web search can help you explore these options.
Finally, there are also business loans. These are generally longer-term offerings and can help your company avoid cash flow shortages during times of planned growth.
Grow Into New Solutions
Finally, it's time to look at your bookkeeping, accounting and inventory control software. As you grow, you'll likely outgrow your original systems in need of more robust inventory and financial solutions. A sit-down with your banker, bookkeeper and tax professional can help determine if there's a need for an upgrade, but here are a few questions to help determine if the time is approaching:
Now you have a solid set of criteria to guide you toward better cash flow for the future. Remember, the more you know about where and how you make money, the more you know about where you're not making money. And that knowledge is powerful when it comes to keeping the cash flowing and your business growing year-round.
Insights on the top cash flow challenges business owners are facing today.
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