Cash is the lifeblood of any business. If you can’t master cash flow, your business may not last long: 29% of small businesses that fail run out of cash, and 82% have some kind of cash flow problems.
Managing cash flow may sound simple—just make more money than you spend—but for many small businesses, it’s trickier than it sounds. The first step to better money management is understanding where your money is going.
Here are 13 must-read money management tips for small businesses.
It’s more and more possible for small businesses to go completely cashless, and there are some significant benefits, starting with the clear paper trail for cashless payments. But as long as you’re accepting cash, you’ve got to create rock-solid systems for keeping track of it.
Unsold inventory costs you money. It’s as simple as that. A good money management plan for your small business includes a good inventory management plan.
Late payments cost small businesses $3 trillion a year, and small businesses spend an average of 15 days a year chasing late payments, according to research by Sage. Don’t let your business become a statistic—make sure your clients are paying you promptly.
Small business money management all comes down to a few key numbers. Dig into the data to make sure that you’re making money on every single sale.
Most small business owners start out doing their books themselves. As your business grows, that job gets bigger and bigger, and you may want to hire an accountant. But no matter who is doing your books, you need strong systems to make sure you’re managing your money well.
Even the best-managed business may occasionally hit a liquidity crisis. If you’re experiencing a slow season or another problem that’s causing a cash crunch, don’t panic—get help.
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