7 Tasks to Improve Your Cash Flow

November 8, 2018

 

 

 

1.  Review Invoicing Practices

 

Small Business invoicing practicing could be causing the cash flow struggles. One of my clients was invoicing by a deposit and final bill. There too much of a lag before final invoicing so SimpliProfit changed their practice to progress invoicing each month which help them collect cash faster and on a regular basis. 

 

2. Review Staffing Levels 

 

When your gross margins erode, it has an impact on your cash flow. My review of the financials indicated the salary expense was too high. The decision was made to downsize the staff. They are now utilizing a more flexible workforce to be able to expand and contract due to the amount of work in-house. 

 

3. Review Accounts Receivable Aging 

 

Every week the Accounts Receivable aging should be reviewed and soft reminders sent out. You would be amazed at how effective this brings in the cash. Also, building a relationship with the Accounts Payable person most often gets you paid quicker.

 

4. Review Industry Practices 

 

In the construction industry, you incur expenses for material before the work even begins. This kind of business does need to collect a 10% deposit invoice for the job.

 

5. Review Flexible Payment Options 

 

Annual insurance premiums – you can either pay for the year or by the month. You will pay a small fee if you opt by the month and this help to reduce the cash out. If you pay upfront you will need to amortize the prepaid expenses each month.

 

6. Review Quoting Process 

 

By reviewing your quoting methods for jobs awarded in your company. One of my clients I worked with was quoting too low, and it affected their cash negatively. I implemented a quoting tool and gave them targets for their gross margins. In three months, the cash flow issues disappeared. They didn’t know what to do with all the cash accumulating in the bank. True statement!

 

 

7. Create and Review Cash Flow Forecast 

 

Creating a cash flow forecast is the best tool to keep your cash positive. It keeps your finger on the pulse. Cash is still "KING" in today's businesses. Some of the advice above helped one of my clients go from closing their business to thriving today.

 

 

Schedule a Consultation Today! 

 

Interested in learning about improving and solving some of your cash flow struggles. Contact us today for your free business consultation! 

 

 

SimpliProfit.com |  e info@simpliprofit.com | p 408-809-1001

 

Share on Facebook
Share on Twitter
Please reload

Recent Posts
Please reload

Archive
Please reload

Search By Tags
Please reload

Follow Us
  • Grey Facebook Icon
  • Grey Twitter Icon
  • Grey LinkedIn Icon

Contact Us

Please use our contact form to submit your questions or requests and we will follow up with you shortly. We look forward to connecting with you.

We are happy to further elaborate our professional accounting services and solutions.

Let's get started, this could be one of your best financial decisions yet!

follow Us

  • Facebook
  • Twitter
  • LinkedIn

Copyright © 2018 SimpliProfit. All rights reserved. Phone: 408-809-1001

Privacy Statement