Successful small businesses must keep a close eye on the bottom line. But when you’re running a business, it’s easy for operations to take a priority over accounting. Here are five tasks, when performed regularly, will keep your cash flow as healthy as possible.
- Make a regular date with your financial reports. Keep an eye on your cash flow from week to week, but especially pay attention to monthly financial data. It’s best to collect monthly reports within two weeks of month end. When you understand receivables and expenses early in the month, you’re able to make timely adjustments that can put you in a better financial position.
- Follow up on past due invoices. Delayed receivables can quickly take your bank account down. Assign a staff member to make calls to remind customers of invoices due, or do it yourself. Knowing payment history may feed into your pricing strategy, as well.
- Watch overhead. Unless you’re a sole proprietor, you have employees who work in your business. Consider all costs associated with labor: wages, taxes, benefits such as health insurance and/or 401(k) matching, bonuses, expense reimbursements for entertaining and/or travel. Compare the impact of various levels of raises as they relate to your profits.
- Track supply ordering and expenses. As much as possible, order supplies no more than once a week. You’ll save time, and probably save money, too. If you use a credit card, use only one card and keep it for business expenses only. Many cards categorize expenses with a year-end report for easy tracking.
- Consider hiring an outsourced bookkeeping service. An outsourced accounting service like Cloudkeeping, a division of Salmon Sims Thomas Accountants and Consultants allows you to access your data, anytime, on any device. It’s a great way to grow efficiency, access, and control without growing costs. For more information contact Becky DaVee, CPA, partner, Salmon Sims Thomas
When you need financial or business advice, we are here to help. We’re here to offer a third party perspective based on insights from many types of businesses at each stage of the business cycle.