How To Solve Cash Flow Problems

shutterstock_123406111If you are operating a small business but your struggling with cash flow problems, you’re business is at risk of closing. You could certainly have sales that’s technically making you money, however, if you aren’t getting that cash quick enough, it could lead to trouble. With that in mind, Randall Dang, a seasoned accountant, has some ways you can solve your cash flow problems before it’s too late.

Fast-Track Your Invoices

Many small business owners will often give their customers a 30-day to 60-day grace period to pay their invoices for the services or products they have received. However, this long period of time can hurt your business because that money is tied up and waiting to be dispersed into your business account. Instead of giving them an extended period to pay you, consider shortening the timeframe or give your customers an incentive to pay quicker. Randall Dang suggests the idea of offering a 5% or 10% discount if they pay-in-full within 5 days of receiving the invoice. This can give your customers a reward for paying quickly and put the much-needed cash back into your business.

Consider Your Employee Count

It’s without a doubt that one of your biggest monthly expenses is your employee payroll and that can eat up a lot of your available cash. Consider letting go employees that are unnecessary to free up some money in your business account. While it’s easier said than done, it’s important to evaluate the actual need because having too many employees can jeopardize your business. If slimming down your employee count is too hard, consider changing healthcare plans to something that’s more economical.

Using Accounting Software

Whether you hire an accountant for bookkeeping purposes or you use accounting software, it’s important to get your finances in order. Some software is simple to use and it can give you greater insight on how your business is doing financially. While on the other hand, an accountant can provide you with sound advice when it comes to business decisions that will be directly impacted by finances. Both options can help you better manage your business’ money and will help you stay afloat.

Find Appropriate Tax Breaks

Another way to solve cash flow issues is by finding the right tax breaks that can benefit your business. Perhaps you are unfamiliar of what tax breaks your business is eligible for and learning about them can put more money into your business account. One of the easiest ways to determine which tax breaks will help your business is through the use of an accountant because they are up-to-date on the latest tax laws and can match you up to the most beneficial ones.

Are you ready to get your business’ finances in order?