These days, we see a lot of businesses looking for ways to cut excess expenses and save. But before any business can really gauge what they should keep and what they should eliminate, it’s essential to spend some time on money management.
Though it does take some focus, businesses should:
- Bill frequently
- Collect often
- Stay on top of billing and receivables
- Set up a monthly budget
- Compare the actual monthly numbers to the budget
- And make improvements based on these numbers
If you don’t have the time to manage your money, delegate it to someone who does. We all have our strengths. If your talents are put to better use managing operations and planning growth, it’s okay to let someone help with your cash flow and accounting.
An outside viewpoint can also help troubleshoot areas that may be causing you some difficulty. For example, if you are tying up a lot of your cash ordering and storing extra stock, consider how you could reduce your warehousing expense by ordering less and implementing a program to respond more specifically to customer demand closer to the time of purchase. You can also survey your clients to find out what they are interested in buying to shed some light on your ordering process.
Another idea is to focus on your marketing campaigns. Though it’s tempting to cut from your advertising or marketing budget, companies that boost their promotion and cut from other areas tend to experience better cash flow. It’s not about spending more; it’s about spending smarter.
Also, consider what you really need to have versus what you want to have when it comes to spending your cash.
For example, take a look at your internet or phone costs. Is the plan really suitable to your business? Have you been a loyal customer for a number of years and could ask for a discount? What about shopping around with other vendors and comparing prices?
You can also review employee benefits and see if there is a way of saving without raising premiums, especially if you have a small group of healthy employees. This may be possible simply be adjusting your deductible.
Adjusting your mileage reimbursement program can also save you money. By asking employees to visit several clients in one area at the same time or asking them to choose more economically priced flights, these savings will add up.
If you’re not quite sure where to start, many companies can offer a “health checkup” of your current money management processes. This often includes a questionnaire designed to help you think about your priorities and how well the systems you currently have in place are working.
For more information on how to improve your money management, contact a Beaton Accounting representative today at 631-921-6894.
Have a question or topic you’d like to see addressed in our next blog post? Just leave a comment or email us at firstname.lastname@example.org.