Cash flow problems are one of the biggest reasons businesses struggle — even profitable businesses. A company can show profit on paper and still run out of cash. The key is improving timing, visibility, expense control, and forecasting.
Step 1: Identify the Real Cash Flow Problem
Slow Customer Payments
- Clients paying 30–90+ days late
- Not asking for deposits on large up front costs
Overspending
- Excess subscriptions and software
- Uncontrolled purchasing
- Non-business expenses paid
Low Profit Margins
Poor Timing
No Forecasting
For both business owners and and nonprofit executives, the above problems can sink an organization quickly. Over 30 years as a bookkeeping business, we had seen more than a few entities fail because the leadership failed to properly manage cash flow.
Step 2: Implement “Best Practices” that match your business
- Accounts Receivable
- Purchasing
- Inventory management
- Accounts Payable/Vendor Terms
- Product/Service pricing
Step 3: Build and Maintain a Simple but Effective Cash Flow Forecast
Not every business or nonprofit needs a dedicated employee or department to help cash flow. Smaller organizations can benefit from a cash flow forecasting system to enable leadership to see where gaps in ready cash might be on the horizon. We have created such systems for businesses and entities of all sizes – scaled proportionally for the needs of our client.
Step 4: Separate Business Accounts & Control Credit/Debit card purchasing
- Operating expenses
- Payroll
- Taxes
- Emergency reserves
Common Cash Flow Mistakes
- Mixing personal and business spending
- Ignoring taxes
- Growing too fast without planning
- Relying only on bank balance per the bank
Most Important Insight-Work Smart, Not Harder
Better systems, monitoring and discipline are the key to Controlling the Cash Flow Chaos! Automation, reporting, and artificial intelligence (AI) can all enable you to garner deeper insight into your cash flow cycles. We highly recommend using such tools to allow you to access the information you need without requiring hours of your time.
Paisley Solutions Can Help!
Overcoming the challenges of predictable and effective cash flow can be a real challenge for business owners and nonprofit leaders. Paula Paisley and her team of bookkeeping and QuickBooks professionals bring decades of experience implementing cash flow prediction and control systems. Make managing your cash flow easier than it is now – Contact Paisley Solutions today on info@paisleysolutions.com or call 610-444-2597.
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