Did you know that eighty-two percent of failed businesses cited cash flow problems as one of the factors in their failure? Cash flow is one of the most important things to manage if you want your business to succeed.
There are plenty of things you can do to increase your cash flow, such as hiring tax services or even just fixing your inventory. If you don’t know where to start with improving your cash flow, then you’ve come to the right place.
In this article, we’ve outlined a few simple strategies you can implement. By the time you’re done reading, you’ll be well on your way to a better cash flow.
1. Hire Tax Services
Taxes have a major impact on your cash flow. In fact, they’re one of your highest expenses. That’s why you should consider hiring professional tax services to assist you.
Professional tax services help you avoid expensive mistakes. They also help you manage your taxes throughout the year and make sure you don’t miss out on important deadlines.
Tax services will also help maximize your deductions, which lowers the amount of money you have to pay.
Finally, tax services can help you choose how to organize your business. There are many ways to categorize what your company falls under. Tax services simply help you choose the one that makes the most sense.
2. Lease Instead of Buying
It might not sound the most logical, but consider leasing equipment instead of buying outright. While buying outright is better for your bottom line, it eats into a huge chunk of your cash flow.
Leasing the equipment you need means you pay a smaller fixed fee each month. It might seem more expensive overall, but it saves money your company might need for day-to-day operations.
In addition, many commercial lease agreements provide servicing. If you choose to rent your equipment rather than buy it, you’ll also be saving yourself the technician fees that you would be responsible for.
3. Cut Unnecessary Spending
At first glance, this tip seems obvious. However, unnecessary business expenses aren’t always unrecognizable as unnecessary.
Or they might seem so small it’s not a problem for you. The problem with that is that small expenses add up, draining your cash flow rapidly.
Dedicate some time to financial management to examine where your cash leaks are and repair them. This could be something as simple as giving up that extra office space you never use. There are also expenses you might pay for year-round that you only need at certain times of the year.
Every cent matters. By getting rid of even the smallest unnecessary expense, you’re ensuring an improved cash flow.
4. Make a Cash Flow Forecast
A cash flow forecast is a projection of the money that you typically expect to flow in and out of your business within a financial year. This is a simple but important tool you can use to forecast both cash flow and profit.
Planning your cash flow forecast helps you to see where shortages and surpluses might arise at different times of the year. It can also assist with decisions such as planning new purchases or opening new facilities.
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5. Avoid Receiving Delayed Payments
Send out your invoices as soon as possible. The sooner you get invoices out, the sooner you’ll be paid. This will lead to improved cash flow quickly without much effort on your part.
In addition, try and avoid letting customers make delayed payments. Put penalties in place and make sure customers are aware of the penalties. Consider including the penalty for late payments in the invoice.
To avoid scaring your customers off, you should also include incentives for paying promptly. Customers enjoy being rewarded for their purchases, which will make them more likely to return to you in the future. This incentive can be something as simple as a future discount on an item.
6. Adjust Inventory
Another easy thing you can do to increase your tax flow is to simply examine your inventory. Figure out which items you purchase don’t sell much and either purchase less of them or stop purchasing them entirely.
These items tie up more of your cash than you’d expect, and you don’t get much cash in return. Sell them off, even if you have to do it at a discount.
Once you’ve done this, look at the items that do sell well. Purchase more of them so that you’re always stocked up. If you run a business where items can expire, adjust your inventory to make sure nothing gets wasted.
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7. Experiment With Prices
Our final advice for you is to experiment with selling price. Every business has a perfect price to sell their products or services at. You just need to find it.
However, you need to remember that customers will only pay so much for a given service or item. Experimenting with prices will allow you to determine how high is too high.
Once you know how much a customer is willing to pay, then you can figure out other factors. One factor to consider is that supply and demand fluctuate.
You may have to decrease your prices occasionally according to lack of demand. However, lower prices can be made up for with higher purchase levels.
Hire Basta+Croop Today
Now that you’ve heard our advice on how to improve your cash flow and tax services, you’re ready to take the next step. Hire Basta+Croop to help you succeed in your business endeavors today!
We are an advisory business based in Charlotte, NC, but we have a nationwide reach. We offer services to a variety of industries, from small businesses to insurance companies.
If you’re interested in knowing how we at Basta+Croop can help you, reach out to us here. All you need to do is fill out the form. We’ll contact you within twenty-four hours with your answers!