Balancing your accounts is an essential part of running a successful small business. But when you notice an issue in your cash flow, what should you do to fix it?
The issues with cash flow analysis come in when you don’t calculate your cash flow often enough to catch problems early. Letting your bookkeeping work pile up may have serious consequences for the health of your business in general.
We recommend that your company reviews cash flow daily to avoid these issues. Always know what your current cash balance is and what your projections will be over the next six months – this detail will allow you to understand which areas of your cash flow require the most attention which in turn will allow you to address the problems with as much notice and time as possible.
Issue #1: Accounts Receivables
Keep an updated account of your business’s cash flow and be sure to keep an eye out for aged receivables. That way, you’ll know which clients are unreliable and have not been consistently paying. Further, with a proper process in place, you can make sure that you collect money quicker from your clients and keep aged receivables levels down.
Issue #2: Sales
You may simply need to draw in more customers or sell more to your existing clients by creating bundles or having a sale on a popular item.
Issue #3: Financial Crisis
If your business cash flow still isn’t balanced, talk with an expert to see if you should consider taking out a loan to have access to funds whilst you work on increasing sales and managing your accounts receivables.
Where to Start
If you’re experiencing any of these cash flow problems or others in your business, it may be time to hire an expert to help you sort through your cash flow issues and get your business back on track. The financial professionals at ABJ Business Solutions are ready to sit down with you and take a look at your financial health for free, so get in touch with us today!