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Where are you bleeding cash? Maximize your profitability by changing your perspective.

August 15, 2018

Every time you log into your bank account, there’s less and less of it. Every time you open the till at the end of the day, you expect more than you find. Every time you sit down to pay bills, you have to figure out which one gets it. If you find yourself regularly wondering “where’s the cash,” then call the ambulance. Your business may be hemorrhaging money.

According to research, poor understanding of cash flow or poor cash flow management is the reason 82% of small businesses fail. The big question is why, and the big task is to stop the bleeding before it stops your business.

Cash management is, at its simplest, knowing what cash is flowing into your business and what cash is flowing out. One of the toughest challenges many small business owners face is juggling finances while keeping their businesses open and running every day.

To help, we’ve put together 8 tips for gaining the visibility you need to manage your cash flow and make better financial decisions.

1. Stay on top of invoices.

In survival mode, it’s easy to let invoicing slip. Why not? A few days won’t matter, and your customers are good for it, right? The problem is, if money’s not coming in on time, you may lose track of what’s due you. Worse, you may not be able to pay your bills on time. And that puts your business in jeopardy. Here’s a checklist to keep invoicing on-track:

  • Keep a schedule. Pick a time each week or month for invoicing, and stick to it.
  • Confirm contact names and addresses. Make sure you have the correct customer contact name and address for your invoice. Delayed invoices mean delayed cash inflow.
  • Provide clear explanations. Make sure your invoices provide a clear explanation of services and charges—especially any add-on fees. The more questions you answer up-front for customers, the speedier the payment process.
  • Note terms of late payment. Whether it’s a 3% or 10% penalty for late payments, noting penalties for late payments incentivizes customers to pay on time.
  • Offer clear and simple payment options. Writing a check and putting it in the mail may work for some customers but not for others. The easier you make it for customers to pay you, the more likely it is you’ll get your money on time.
  • Brand your invoices. Clearly identify who’s sending the invoice. Consider invoices yet another opportunity to build your brand with customers.
  • Choose your tools. InvoiceASAP works with Clover devices, most mobile devices and computers to create professional invoices and accept credit card payments. You can also check out InvoiceAble.

2. Pay bills on time.

Not staying on top of bills or credit card payments can mean incurring fees, interest, or fines. That’s especially true for sales tax.

In a recent conversation with David Joseph, former restaurateur and tech company cofounder, he shared that a surprise $9,000 sales tax bill from his bookkeeper caused him to ask: “Why can’t someone do our sales tax the way ADP does our payroll?” That’s how he conceived a tool that helps restaurant owners sleep at night and launched his tech business: DAVO.

DAVO for sales tax automatically collects daily sales tax, holds it securely, then files and pays it in full and on time. No more surprise sales tax bills or late penalties.

“It’s automated,” Joseph said. “The Clover [app] calculates sales tax. It sends us the sales data. All of that is done automatically, and what we really do is cash management.… We put a little bit of money aside every day.”

To help restaurants capture vendor bills, Sourcing Club syncs daily sales report from your Clover device to QuickBooks, helps businesses capture pictures of vendor bills, and moves those pics into QuickBooks. Although it doesn’t address inventory, it’s an easy way to track invoices—and it’s free.

3 Reduce cash handling.

Every time cash changes hands at your business, there’s potential for error. But tracking cash can be a time-consuming job, particularly for retail businesses.

To help businesses track cash, Clover offers two apps:

  • Cash Log, a free Clover app, is especially helpful in retail where cash regularly changes hands. This app tracks all customer cash transactions and manager cash drawer activities to spotlight cash movement.
  • Cash Track records cash movement from employees or registers and sends daily shift reports by email or to your Clover dashboard. It even helps restaurants calculate tips.

And these apps help minimize the need to handle cash:

  • CoinOut is a digital change handler that lets customers receive and save change from a transaction digitally and get cash back to spend with your business. Or, they can take a picture of their receipt to earn cash back.
  • Donate at Checkout lets you collect donations at the end of a customer transaction for a charity of choice. With preset amounts for donations and a Round Up feature, you can access reports on donations received from its online portal.

4. Nail your staffing needs.

Over-staffing can mean spending cash on resources you may not need. But under-staffing can mean lost sales. And no-shows can spell disaster. How do you strike the right balance between having too many hands on-deck and too few? You observe, chart, map, schedule, and publicize.

  • Calculate. Calculate your average hourly/daily transactions. Check out #3 in this post. Tip: For hourly transactions, substitute “total hours” instead of “total days” in measurement period.
  • Track. Track your customer traffic and proceeds by day and hour. That can provide a visual of your overall traffic flow and can be a helpful indicator of when you need extra hands. Be sure to note how flows change on weekends, holidays, and seasonally.
  • Map. Now, figure out how many customers or transactions one resource can handle at a time or in increments of time, like an hour. Compare that number to your traffic for a sense of how many hands you may need to accommodate customers.
  • Schedule. Build a schedule that maps employees to your anticipated flow of traffic and income. Always have a back-up plan for no-shows, and a clearly-defined way for employees to request changes to the schedule, when needed.
  • Publicize. Employees who show up are the hands of your business, so spend time making sure employees know what the schedule is, where to find it and how to handle changes should the unexpected happen.

A great tool to help manage your team is Homebase. With mobile apps, time clock and scheduling tools, Homebase also offers a variety of employee management tools, like automatic shift reminders.

5 Preserve perishable inventory.

For retail or product-focused businesses, inventory management is one of the most important tasks they face—and one that can mean lost cash if mishandled. For businesses in the food and drink industry, spoiled inventory is a major cash risk.

“The problem in the restaurant business,” said David Joseph, “is that if you ask most chefs and most owners, ‘So what’s your food cost right now? What are you paying for food? What’s the percentage of your total?’ [they respond], ‘Well last month, it was like 34 percent.’ Last month? You should be doing that every single day.”

These apps help businesses manage perishable inventories:

  • Recipe Keeper helps you track the stock you have on-hand for various dishes or recipes. Simply download the app and map your recipes to ingredients. As you sell your goods, the app tracks your stock, minimizing waste and manual inventory errors.
  • Bottle Keeper lets you determine exactly how much liquid stock you have in inventory. Perfect for bars, restaurants, vape stores, salons, or liquor stores. You can even save recipes and track ingredients with every sale.
  • One Click Reorder is ideal for food-service businesses like pizza shops. Offering a popup that displays a customer’s order history, this tool is a perfect upsell tool and gives businesses insight into customer preferences.

6. Freeze fraud in its tracks.

Many businesses, especially retail businesses, can lose track of cash through fraud. A payment, refund, tip, or discount exceeds a specified amount. A completed transaction gets deleted, and the cash gets pocketed. Cash goes missing from a cash drawer, or the cash drawer opens without a transaction. It’s traditionally been tough to track those kinds of tactics.

Fortunately, new tools like Ping Me If can help. Focused on fraud deterrence, Ping Me If provides email or text notifications when these kinds of events happen in your business.

7. Know your KPIs.

As David Joseph said: “A restaurateur once said to me, ‘The most expensive seat in a restaurant is the empty one, because it’s costing you. It’s not bringing you money. It costs’.”

One of the most difficult mindset shifts small businesses have to make if they want to thrive and grow is understanding how to measure the health of the business. Restaurants, for example, have certain fixed costs: whether it has all seats filled or just a couple, the owners still pay rent.

Unfortunately, many businesses experience cash bleedout because they don’t have a pulse on these 9 numbers that matter. From profit margin and average ticket size to cost of acquiring new customers and conversion rates, these numbers, also called Key Performance Indicators (KPIs) can lead businesses to better financial management. In fact, understanding these KPIs is crucial to businesses conducting analysis that results in pricing their products more profitably.

8. Plan for unplanned expenses.

Not planning for the unexpected definitely impedes cash flow. To help small businesses plan for unplanned events, like a fridge that’s on the fritz or a heater that stops heating, DAVO creator David Joseph and team designed two products that put saving on autopilot: Savings Club and Sweep and Save.

“How many times do restaurants say, ‘Oh, the air conditioner broke. The refrigerator broke,’ you know?” Joseph asked. “If you put aside $20 a day, at the end of the year, you’re gonna have somewhere around $7,000.”

  • Savings Club, an annual savings tool, automatically collects funds each day and returns them to you mid-December for year-end expenses.
  • Sweep and Save pulls a percentage of daily sales out for monthly expenses and gives it back to you on the first day of the next month.

Not stopping the cash bleed leads many businesses every year to close their doors. But with due diligence, planning and a few helpful tools, it’s not only possible to stop the bleed, but improve the overall health and outlook of a business.


Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, Sun Trust and Wells Fargo. You’ll also find Clover at our trusted partners including Ignite Payments, Restaurant Depot, and Sam’s Club. For more information, visit us at clover.com.