Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for
posted
Did you know that 61% of small business owners struggle with cash flow problems? Positive cash flow is the goal for any business, and the lifeblood to keep it going. However, cash flow problems affect businesses on a global scale! I found an article in the QuickBooks Resource Center that explains how to bounce back to positive cash flow.
To start, there are a few things that would impact the flow of money, specifically causing it to be slow:
1. Lacking cash reserves
2. Expensive borrowing
3. Decreasing sales or profit margins
4. Outstanding receivables
5. Uncontrolled business growth
6. Too much inventory
7. Seasonal changes in demand
1. Lacking cash reserves
2. Expensive borrowing
3. Decreasing sales or profit margins
4. Outstanding receivables
5. Uncontrolled business growth
6. Too much inventory
7. Seasonal changes in demand
With that come several effects of cash flow problems on small businesses, such as:
- Late payments to suppliers, leading to strained relationships.
- Late or missed debt repayments, resulting in decreased credit ratings.
- Additional debt to cover business expenses.
- Missed opportunities to grow the business through investments.
- Negative impacts on marketing strategies and competitive advantages.
- Covering business expenses with personal funds.
- Reduced employee morale and unpaid wages.
- Reduced customer satisfaction.
- Business closures due to insolvency.
Of course small business want to avoid all of these things! Well here's how:
- Create a short-term business survival plan
"Break down your business plan, processes, operations, income, and expenses in your plan. If applicable, use job costing to review your business’s profit and loss statements and margins."
2. Reduce expenses by:
2. Reduce expenses by:
- Discontinuing non-essential services temporarily.
- Expanding virtual services.
- Canceling or reduce premium services.
- Moving to a lower-cost supplier temporarily.
- Reducing operating costs.
3. Speed up accounts receivable by:
- Sending invoices earlier.
- Reviewing your billing cycle and payment terms.
- Breaking up payments into project-based weekly or bi-weekly installments.
- Requesting payments from past-due accounts.
- Asking for a deposit or partial payment upfront.
- Encouraging or incentivize early payments.
- Accepting multiple payment methods.
Check out the full article linked above for even more info! And while you're here, how do you resolve a cash flow problem? We'd love to hear from you! Take care!
