Tips on Managing Cash Flow
Updated: Dec 2, 2020
Businesses and services all across the globe have taken a huge hit as a result of the corona crisis. A lucky few have managed to stay in business over the last several months, but unfortunately many have been barely scrapping by or just completely forced to shut their doors.
Below we provide business owners with some tips on how to manage cash flow, especially during these uncertain times.
Manage it everyday.
You should be looking at the balance of your bank account and keep track of what’s going in and out everyday, so that when there is an issue (like a surprise charge for example) you can rectify it quickly. It’s also a good idea to keep an excel spreadsheet that manages your cash so you know when certain payments (like rent) need to be made or when they will be automatically taken out.
Prepare for cash flow challenges.
As a business owner, the last thing you want to be thinking about is “What if my business starts going south?” But it’s best to be prepared if something like that happens, even if it never does - ensure you have some funds and resources set aside.
There are many ways you can conserve cash flow:
- talk to your accountant about government or tax programming you could take advantage of
- consider what you really need to run your business and cut unnecessary and nice-to-have costs
- cash in your assets (like selling a nice-to-have item)
- lease equipment instead of buying it
- negotiate costs on items or products you consider buying for your business and be prepared to walk away if you aren’t satisfied with the offer
Use mobile payment solutions.
Bring in revenue faster by digitalizing your payment methods. Instead of waiting for a cheque in the mail, you can have your clients and customers pay by credit card, e-mail transfer, or PayPal.
Click here to watch President of TorontoEntrepreneurs.ca Marc Belaiche, CPA, CA discuss this topic.
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