It is not surprising that the impact of the economic environment on a business’ cash flow concerns small business owners across the Commonwealth. In the latest results of the PNC Economic Outlook survey, only 19 percent of Pa. small business owners expect their cash flow to increase in the coming months.
In order to cope in today’s economy, 87 percent of businesses surveyed plan to reduce or eliminate expenses, 73 percent plan to reduce capital spending, 79 percent plan to conserve cash and maintain more bank deposits and 65 percent plan to collect receivables more quickly.
The key to positive cash flow is to keep money coming into your business faster than it is going out. By giving your customers multiple payment options – such as credit cards, check cards, gift cards and electronic check services – and using remote deposit services, which allow you to deposit checks into your business checking account without leaving the office, you will be able to collect and receive your payments in a timely manner. Successfully managing receivables allows you to put your funds to work or back into your business more quickly.
The current market conditions provide small business owners a greater opportunity to reassess their cash flow needs. In addition to accelerating the collection of receivables, you should also focus your attention on the following tactics to ensure you are maximizing your business’ cash flow:
-Improve the way you make payments
-Invest your excess cash effectively
-Utilize online information and reporting tools
-Ensure access to cash when you need it
-Collect receivables more quickly
Managing and improving cash flow today in measurable ways will prove invaluable throughout the journey of your business.