How Can I Improve My Cash Flow?

Cash flow is the heartbeat of any business. Whether you run an e-commerce store, non-profit, creative agency, or law firm, steady, predictable cash flow is a must-have for sustainable growth and long-term success. With a proactive approach, leveraging the right technology and data-driven insights, you can help your company stay financially healthy.

Here are just a few actionable ways you can improve your cash flow.

Start With a Cash Flow Analysis

How do you measure success? By comparing it to your starting point. To understand your current cash flow position, conduct a thorough analysis. Establish where money is coming from, going to, and where potential gaps may exist.

With real-time data and detailed reporting, it becomes easier to identify patterns and forecast cash needs. You’ll also have the information needed to address potential issues or shortcomings before they become detrimental cash flow problems.

Optimize Accounts Receivable

Late or unpaid invoices can create significant cash flow challenges for your business. To improve your standing, consider:

• Making it easy for people to pay, like 1 click! Or even no-click payment if you set them up on pre-authorized deposits.
• Setting clear payment terms and promptly following up on overdue accounts. Don’t be shy about following up with clients on payments. You can tell them you have a big purchase coming up and would appreciate prompt payment. You could even create a standard email for when payments are past 30 days, past 37 days (sent one week later), and past 42 days (sent two weeks later), with escalated urgency in your wording.
• Implementing automated invoicing systems to help ensure timely billing
• Add a deposit to your engagements. When a client signs, have them pay a deposit to lock in your capacity and order your materials. You can explain that you’re very busy and you need to work with serious buyers who can show they’re committed.

Our finance team can review your current processes and suggest time-saving improvements that can help reduce late and unpaid invoices.

Strategically Manage Accounts Payable

Collect quickly and pay slowly! An effective accounts payable strategy can help you maintain a positive cash flow, even when dealing with late customer invoices. Here are a few strategies that could help protect your supplier relationships:

• Utilize early payment discounts where feasible; while these don't happen as much anymore, if you can take advantage of payment terms, they're usually VERY advantageous! For example on a 2/10 Net 30 you get 2% discount if paid in 10 days. That's about a 43.2% Guaranteed Return On Investment!
• Ask vendors and suppliers if you can have more flexible payment terms to manage your cashflow. You would be surprised how often they say yes!

It can be difficult to balance paying your invoices while keeping enough cash available for essential business operations. Our experts are here to help with accounting, payroll, and advisory services that ensure cash is where you need it, when you need it.

Control Business Expenses

Ever heard the saying, “A dollar saved is a dollar earned?” Well, for companies, it’s more like, “A dollar saved is a dollar that can be reinvested into your business.”

You’ll want to regularly review and optimize your business expenses, as they can significantly impact your cash flow. Take a look at all current subscriptions to software costs, as well as any other regular expenses you incur. A comprehensive understanding of what you’re paying each month can help you eliminate unnecessary costs and identify money-saving opportunities.

Connect with us for helpful insights that allow you to optimize efficiency without sacrificing growth.

Improve Inventory Management

If you have a product-based business, inventory management is critical to your cash flow. Too much inventory? That’s tied-up cash that could have been used elsewhere. Not enough inventory? Now you’re looking at missed sales opportunities, further impacting your cash flow.

If you run an e-commerce business, benefit from our streamlined inventory management and forecasting to keep track of your stock and predict demand!

Explore Financing Options

Even with the best cash flow strategies, there may be times when additional funding is needed. Seek financing options early! The saying goes to get a line of credit when you don’t need it so you have the cash for when you do.

Financing options could offer the flexibility and stability your company needs, especially during a growth phase or unexpected downturn. But how do you know which avenues to explore and where to start? Our business advisory services can help.

We’ll carefully analyze every aspect of your company. And with our cost control strategies, budgeting support, capital management and cash flow projections, outside funding may not even be necessary. If so, we’ll help you find the right option for your business model and current and future needs.

Find Cash Flow Success With Zenbooks

Cash flow isn’t about chasing down payments or cutting costs across the board; it’s about a comprehensive financial strategy that supports your long-term success. Here at Zenbooks, we can optimize your cash flow to improve your financial health and drive sustainable growth. Connect with us to build a strong financial future!