Look at Your History
The best way to measure cash flow is to look at your history and make an educated guess about what to expect. Paying attention to the past year, quarter, or even week can help business owners understand how to act in the present.
In a perfect world, clients and customers would all pay their bills as soon as they get them. But in reality, only a select few are going to live up to our high standards and make their payments quickly and efficiently. The best way to encourage this behavior is to offer financial incentives to those who pay their bills on time. Discounts are an effective way to do this, as are up-front deposit payments at the time of purchase.
Pay attention to customers who take their time to pay their bills. While rewards for timely payment can be a good strategy, requiring cash on delivery is a good way to keep negligent bill payers in line.
Your business’s bottom line is about more than just sales. Keeping track of expenditures, especially when they are growing more rapidly than usual, is extremely important. Pay close attention to quickly-growing payables and find ways to cut down on costs.
The key for any successful business is the ability to predict the inevitable times when our sales fall a bit short. Acting in advance and establishing a line of credit with is a good way to guard against shortfalls.
Remote Deposit Capture
Remote deposit capture, or RDC, is an excellent way to improve cash flow management in the 21st century. Using an RDC system allows businesses to manage large volumes of checks quickly without making extra trips to the bank.
Increased sales are always a good sign, but it’s important to make the extra effort in managing finances when a business is growing. It can be easy to gain a false sense of security when things are going well, and keeping costs and payments in balance is as important as ever.
Herring Bank proudly offers remote deposit capture and a variety of other merchant services to our business customers. If you have questions about managing your business’s cash flow with any of our merchant services, please call 866-348-3435. A Herring Bank representative would be happy to help you!