Top 10 Ways to Put More Cash in Your Pocket
Cash really is king. Cash flow is what it is all about, and cash flow problems can kill businesses. According to a U.S. Bank study, 82 percent of business failures are due to poor cash management. Here are some great ways to keep more cash in your business’ pocket.
1. Profits aren’t cash. Profits are accounting. You can’t pay vendors or employees with profits, only cash. You can spend all your cash on assets like equipment and then wonder where the profits are.
2. Don’t treat your business as a money tree. Numerous business owners suck every ounce of life (cash) out of their company and then wonder why they have cash flow problems.
3. Growing businesses suck up more cash than you think. Growth costs cash—and more cash. The faster a business grows, the more financing is needed.
4. Track KPIs (Key Performance Indicators). KPIs are used to measure success. Fill in the blank: “By not using KPIs, I am setting myself up for _______.”
5. Stay current (ideally, daily) on accounting. Timely financial reporting exposes problems before they become nightmares and also identifies opportunities for growth. Timeliness = more cash.
6. Receivables are bad. Receivables is cash in a customer’s bank account that belongs to you.
7. Get a business line of credit. It’s much easier to obtain financing when we don’t need it. Get a business line of credit now, before the you-know-what hits the fan.
8. Keep a rainy day fund. Excess cash on hand eliminates a lot of stress.
9. Get customers to pay faster. Use a free service like BlisPay (six-month, no-interest credit card for customers).
10. Measure, measure, measure. What gets measured gets done.
Kevin A Marshall, CPA owns the virtual Tucson CPA firm Better Office Solutions (BOSS), where “We Love Messes”. He is also a public speaker and entrepreneur, residing in Tucson with his wife and three children. Connect at 888-520-BOSS or KMarshall@BetterOfficeSolutions.com. See ad, page 33.