A good example of a large variable expense is payroll.

Estimate the cost of any large variable expenses that you expect to hit your bank account as they get closer. Any fixed, recurring payments that hit your bank account automatically should be entered into QuickBooks in advance through recurring transactions.Ĥ. Services like QuickBooks payments and make this a breeze.ģ. Make sure accounts receivable (invoices to customers) and accounts payable (bills from vendors) are always up to date. Always sort your bank account by cleared status.Ģ. If you want to really get a handle on cash flow here are some easy steps to follow:ġ. I use QuickBooks to manage cash flow for our small business. Keep Solid RecordsĪnother way to boost cash flow is to track it closely. While this seems like common sense, most business owners don't follow this advice. So they jumped at the opportunity, and guess what happened? They didn't have enough money to make their next payroll.Īnother simple rule to follow is to hold off on paying your bills until as late as possible. I once heard of a business that was offered a 10% discount on their office rent if they prepaid for six months.

But seriously, I have heard of some stupid stuff in my career as a bookkeeper. I know what you are thinking: For some people, this is easier said than done (especially in America, right?). Don't Make Bad Decisions With the Cash You Do Have If you feel you are not going to collect and a discount might change that, then some money is better than no money. If you really need cash badly, offer a small discount like 3%-5% if the invoice is paid today. I'm not talking about factoring your accounts receivable, as that is rarely a good decision. If I pay a vendor the same amount every month for a service and they take a credit card, I sign up 100% of the time.Ĭreate payment terms, enforce them, and follow up on outstanding invoices (pretty self-explanatory). I highly recommend that you only accept credit cards. If you are good at what you do, nobody will care. Do yourself a favor and take whatever you were going to charge and increase it by 3%. The time you will spend waiting for a check to arrive in the mail is a cash flow killer. So many businesses hold out on accepting credit cards because they feel the merchant rates are too high. The amount of money you will save shopping for a better rate will be eaten up by your wasted time recording the payments into your accounting system.Īccept credit cards. I personally use QuickBooks payments for our processing needs solely based on the fact that it syncs payments and fees into QuickBooks. You need to have a good invoicing method that makes it easy for your customers to pay as soon as they receive the invoice. When you confirm a sale, email an invoice out right away that your customer can pay. It is important that you get cash coming into your business as quickly as possible. Below, I will give you some practical advice on how to properly manage small business cash flow. I consider myself a real master of monitoring and controlling the cash flow for our small business.

'90% of small business failures are caused by poor cash flow. Put simply, not enough cash coming in the door and too much going out.' Even if you are just a startup with no revenues, but you have raised money, cash flow is still incredibly important. Properly managing your small business cash flow is critical if you want to succeed.

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