6 Tips for Improving Cash Flow

6 Tips for Improving Cash Flow

Your small moving business can be a total success or a total failure based on cash flow. Cash flow is the blood of any small business.  You need to have a lot of money coming in to make up for all of your company’s expenses. If you aren’t receiving any money but you have to pay bills, your company will not grow.  The amount of input needs to be greater than the amount of output in order to grow, hence increasing cash flow. To increase cash flow, you simply need to collect your receivable as fast as possible while slowing down your payables as slow as possible.  It sounds a lot simpler than it actually is, so below are some tips to improve your business’ cash flow.

Find a good accounting software. Having an automatic accounting software will make it easier to monitor how much money is coming in and how much is going out without all of the messy mathematical mistakes.  Automated accounting will save time, energy, and help monitor cash flow to find where your business could use some changes, whether it be in spending or better time management.  Look at accounting packages that are made for small businesses such as QuickBooks or Peachtree.  Better yet, look for a moving software that has accounting features in it such as MovePoint so all of your processes can be in one.

Generate monthly financial statements.  If you got an accounting software, it will automatically generate a financial statement. You can use your software to generate an income statement, balance sheet, and cash flow statement. That way, you can see where your company could use improvement and how profitable you are. It will allow you to stay up to date with your finances and find problems early.

Give customers as many options for payment as possible.  Nothing could be worse than a customer wanting to use your company and finding out they cannot pay.  Everyone uses a different method of payment.  Some people may only use credit cards, while others could pay for everything in cash. Make sure you can take whatever they decide to throw at you to pay with to keep the customer flow just as constant as your cash flow.

Watch your spending. Because cash flow is simply a balance of input and output, what goes out is just as important as what is coming in.  Using your automated accounting software and monthly financial statements, you can find where your errors are in spending.  Find what costs you can eliminate in order to improve cash flow.  You can cut costs without harming your moving service, like utilities and office products. Simple changes in spending can greatly increase cash flow.

Deposit checks as soon as you get them to maximize cash in the bank. The more amount of money you have in the bank, the more money you have to spend, therefore keeping a constant cash flow.

Pay bills as late as possible.  Remember the “slow down payables as slow as possible.”  This is where that comes in.  Waiting as long as possible to pay bills will increase the amount of money your company has at one time.  If you use online billing, pay bills the day they are due. That way, you have money for as long as you can.

There are lots of different ways to help improve cash flow.  Making small changes to the way your business gets money and spends money will make a huge difference in overall performance.