It may come as a surprise (and a relief!) to know that there are some things you can do as a small to mid-sized business, or even a startup, to manage your cash flow and stay ahead of the game. Yes, even during difficult times. Interested? Keep reading!
Monitor Your Spending
This is the time to do a cash flow analysis and keep a very close eye on where your money is going. Maybe you’re still paying someone for services you no longer need, or subscriptions you don’t utilize. Take a look at all your accounts as well as your operating cash flow and be sure to know where every cent is going, and make adjustments if necessary.
Although it sure would be nice to treat your employees to gifts and bonuses right now, don’t if it’s going to be a hardship on your business. Continue to let your employees know you appreciate them by planning some great treats or incentives for them once your business is able to bounce back!
Ask for Help
If you’re having a hard time paying your bills it’s worth asking for a grace period for your payments. Many other businesses are going through a tough time and may say no, but larger companies will likely be able to extend your due date during difficult times.
Ensure You’re Collecting Any Money Coming to You
Although everyone is going through a tough time right now, you have to ensure your clients and customers know how and when you expect payment from them. If you have any outstanding invoices, follow up on them now, and make sure you’re doing business with people who have a good track record of paying their invoices on time.
This is also a good time to look into local or federal supports being offered to small businesses, and apply if you’re eligible.
It’s always a good idea to periodically renegotiate any ongoing contracts you have with landlords, insurance companies, and other businesses you work with. But especially in these unprecedented times, these businesses may be willing to cut you a break on payment and renegotiate terms for the next few months.
Tough financial times do generally turn around, but it can take a while. You’ll often go through some bumps in the road before you start to see the upside. Since this is a global situation, and other businesses are going through the same thing, keep an eye on what others in your market are doing and emulate them. When the economy begins its upswing, you must be prepared to start competing again. Although no one can guess when this situation will resolve itself completely it’s a good idea to make financial goals for the future. You can always alter or extend them if you need to.
Use a Professional
Your finances are vital to your success. This means it’s important to have someone who truly knows what they’re doing, as well as someone who knows what to look for with your financial input and output. In other words, a bookkeeper who takes a few hours to balance your books once a month isn’t going to cut it.
Let us help you take control of your finances and keep everything on track. Contact Virtual CFO today with any questions or to find out how our virtual controller services can help you.