The #1 obstacle for small business owners is managing cash flow but with careful planning, discipline, and good financial management tools you can get over the hurdle much easier.
At times, it can be difficult for a growing business to decrease the lag between the time you have to pay your suppliers and employees and the time you have to collect receivables from your customers. It all falls back on practicing good cash flow management. This simply means delaying expenses as long as possible while encouraging anyone who owes you money to pay as quickly as possible. Practicing careful cash flow management will allow a business to estimate the amount of cash it will have on hand at any given time, project trends in cash inflow and outflow, and plan for any potential shortfall’s or surplus’s in cash.
Fidelity Bank’s VP and Business Services Manager, Sharon Mullaney, stressed the importance of having a professional banker come into your business to perform a full analysis of cash flow. This will help you create a plan to keep track of the money coming in and out of your growing business. Here are a few examples of what a business services professional will look at:
From the business analysis, the professional will be able to recommend various tools and services to help with cash flow. Until those tools are implemented, here are a few tips to improve receivables and manage payables:
For more information on cash flow management, call or visit any one of our 10 Fidelity Bank branches or listen to our radio show at “Fidelity Bank – On Business.”