
Cash flow isn’t just about money in and money out. Yet, many small business owners will overlook cash flow nuances, resulting in financial failure. Especially during the holidays, unexpected dips in return and a need to prepare can cause small business cash flow to take a significant hit.
As outflows peak during the holidays, promotional investments, longer working hours, and an increase in stock are just a few business factors you’ll have to hone in on before taking your sabbatical.
Manage your cash flow effectively with these three easy-to-apply tips.
Tip 1 – Forecast Your Expenses
By taking a dip into your books, researching local trends, and budgeting your spending accordingly, it’s entirely possible to take a peek into your business’ financial future. Companies can’t move ahead without first looking forward.
Before re-evaluating your staffing and stocking, first, forecast your potential for holiday earnings. Without doing so, you run the risk of over or under-performing. When you have a better idea of how much you expect to earn, you can better drive your marketing strategy.
When it comes to stock, you don’t want to be stuck with items you can’t sell or run short of products that are in high demand. Don’t leave customers neglected and irritable with poor scheduling of holiday vacation leaves.
When measuring cash flow, take a closer look at:
Learn the simple steps to prepare cash flow projections to improve your business cash flows.
Tip 2 – Separate Finances
As much as possible, separate business and personal finances, mainly if you hire an assistant. Similarly, if you use a business credit card, don’t dip into it for personal expenses. Remember—lunch plans for the department don’t always count as a business expense.
Take the time to discern between in-office expenses that help further your business and ones that satisfy menial tasks.
Tip 3 – Get Ahead of the Game
Be as proactive as possible with your invoices. If you’re receiving payments in retrospect, remain vigilant with past-due invoices so you can quickly identify slow payers. Whenever possible, settle invoices as promptly as possible.
December is the season for gift-giving, promotions, and discounts. If you’re advertising freebies on your social media channels and encouraging pre-sales, get a head start on balancing your books. Record every deal accordingly—don’t leave the mark-downs to pile up before it’s too late.
Conclusion
As a rule of thumb, it’s best to adhere to a healthy cash flow formula all year-round. However, you’ll want to pay particular to holiday funds, which can all too quickly get out of hand.
Streamline your business cash flow management with technology-forward financial solutions at FiBrick. Our strategies aim to optimize your business’ fullest growth potential with state-of-the-art accounting software.
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