When we are going to enter into 2017 a few days later, it is the great time for individual and small business management to look back on the last year’s up and downs and take a note from the past experiences for the next year. A great challenge for small to mid size businesses is the cash-flow management. Here is the list of to-do actions to improve your cash flow:
Resolution 1: “I will examine my current cashflow”
January is usually a slow business month so take advantage of that extra time to pore over your previous year’s books. You won’t be able to improve your future cashflow until you know what’s currently causing problems. If regular cash shortages are slowing your business growth, consider whether you’re holding enough back during bumper months to tide you over the inevitable lean periods.
Resolution 2: “I will create a 12-month business forecast”
Once you’ve recapped, it’s time to create a cash-flow projection for the coming 12 months. Draw up a formal plan for growth, and consider how you’re going to achieve it. If your plans include expanding your premises or doubling your staff, you’ll need to work out where the cash will come from to realize your goals.
Resolution 3: “I will find extra funding”
If you’ve got lofty ambitions for the coming year, it’s likely you’ll require help with additional financing. Remember that finding the best financing for your business doesn’t happen overnight. There are many lending options on the market these days, so research well to find a company with a strong track record in the kind of borrowing that suits your business.
Resolution 4: “I will streamline my accounting”
It’s vital to keep good accounting records to stay on top of your business cashflow, so either resolve to improve your bookkeeping skills or employ someone to do it for you. Input receipts and expenses as soon as you can, create a monthly cash budget, and keep your tax records in order. New York Tax Lawyers will build tax recommendations in such a structured way so that you can minimize the liability of tax in any condition. If you don’t want to spend money on a professional accountant, consider investing in accounting software or move all your financial records into the cloud.
Resolution 5: “I will manage my inventory better”
Holding lots of slow-moving stock requires extra storage costs, and will damage your profits if it remains unsold too long. Examine the turnover rate of your current inventory, restocking only items that sell fast while jettisoning products that sit on the shelves. However, be careful to keep enough in stock to satisfy customer demand.
Resolution 6: “I will create better terms”
Late payments by customers and suppliers are the main reason small businesses suffer from cash-flow problems, so if you want your money in 30 days, ask for payment in 14. At the same time, try to delay your own payments as much as possible without jeopardizing your business relationships. If suppliers insist on prompt payment, seek an early settlement discount.
Following these resolutions will keep your cash-flow healthy and ensure your Happy New Year lasts the whole year through!