Discover How You Can Increase the Cash Flow of Your Healthy Small Businesscustomonecfo
It’s probably safe to assume that just about every small business within the Greater Des Moines Region has the same main concern: “How do I increase my cash flow.” Good question. Fortunately, Des Moines CPA and accountants have answers, and they are willing to share some of them with you right here on this page.
The answers primarily involve specific steps the Des Moines small business owner can take in both increasing the inflow of cash into their business, and, conversely, reducing the outflows. Let’s see how this works.
How Des Moines Small Businesses Can Increase Cash Inflows
Increasing cash inflows involves things you can do with your business profits and assets, as well as what you can do related to business policies involving your customer base. First, let’s examine what you can do with your profits and assets.
- Liquidate inventory and equipment that has become obsolete. Do you have equipment you’re not using that’s sitting around taking up valuable space? Sell it, either outright or through a salvage broker. Use the proceeds to boost your reserve cash position.
- Set up an interest-bearing cash account. If you deposit your profits in an interest-bearing account, your money will grow, albeit not dramatically due to current interest rate, but grow they will.
Now let’s look at some of the things you can do with your customer base to increase cash inflows.
- Offer a discount for payments received well before the due date.
- Charge interest on customers who are late payers.
- Work with collection agencies to collect on long-term delinquent accounts.
- On large contracts, stipulate that a deposit will be required.
- Work with your bank to establish lines of credit on both your inventory and your accounts receivable.
How Des Moines Small Businesses Can Reduce Cash Outflows
What about things you can do to help your cash flow by reducing cash outflow? Surprisingly, there are quite a few things you can do.
- Renegotiate long-term debt with the aim of lowering your payments.
- Move to a bimonthly payroll.
- On purchases, take advantage of payment terms that offer discounts for paying with cash.
- Try and purchase used equipment rather than new.
- On capital equipment, repair when possible rather than replace.
- Look for equitable barter arrangements for goods and services with your customers.
As you can see, there are many steps you can take to increase your small business cash flow. Perhaps the best step would be in consulting with Des Moines CPAs and accountants who have expertise in both your particular industry and in assisting small businesses in the implementation of proven strategies that can lead to increases in cash flow.
Here in the Greater Des Moines Region, CustomOne CFO & Controllers is the recognized leader in helping small business to reach their maximum potential. Contact them today to set up a free consultation that can lead you and your business to increased profitability.