Cash Management Tips for Your Small Business
Effective cash management is a priority for every small business. As most small business owners can attest, it’s important to know where every dollar is coming from and where it’s going by using the right products, services and controls. Even though transaction types can differ depending on your industry, some general guidelines for managing cash flow apply across the board.
Here are some tips to keep in mind:
Forecast your cash flow – Not only is forecasting a good idea for budget purposes, the process may help you uncover any uncollected or unpaid invoices. Create a habit of consistently checking in on your forecast – on a monthly basis, at the least – to help you plan for the unexpected and make the right financial decisions.
Find a relationship manager you trust – When choosing a bank for your small business, make sure you have access to a dedicated cash management relationship manager. A relationship manager can help you determine the right services to help improve cash flow and gain processing efficiencies – all things that add to the bottom line.
Effectively manage payables and receivables – Along with more basic services like business online banking, ACH, check imaging and wire transfers, you may have a need for remote deposit, merchant services, lockbox services and more to help manage your transactions.
Take advantage of incentives – Look into federal and state-specific incentive programs for your industry to see if you qualify for savings. Every business could use a little extra cash in their registers.
Make your cash work for you – Talk to your relationship manager about options to move surplus cash to interest-earning accounts automatically. Invested balances allow you to maximize earnings on your funds while maintaining liquidity for daily operational needs.
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