cash flow

Cash flow tips to help your small business

At some point, most businesses will hit cash flow issues, even with the best cash flow tips at hand. Sometimes businesses will delay payment to vendors and discount invoices as an incentive to get customers to pay faster. This may seem like a good solution. However, these temporary “solutions” can set the business up for even more cash flow issues. Improving efficiency in the accounting department is a small project that will take little time and can return great results. With a well-thought-out plan and using the technology your business currently has, you can set up some best practices. Here are some cash flow tips that will help your inflow and outflow of cash – if you apply them!

Tip 1: Frequent Projections for better cash flow reporting 

Make projections frequently. By closely monitoring critical cash flow data, you’ll be able to make better, more accurate and more up-to-date projections. You’ll be more likely to keep your business out of financial trouble. Your projection reports should be easy to create, save and auto-refresh with the most current data when you launch them. A sound accounting system will allow you to easily set up an “at-a-glance” view where you can select the data fields you want to see to make these cash flow projections. Of course, the query criteria will depend on the data that exists already in your system.

Tip 2: Customization for better cash flow management 

Every accounting system can manage debits and credits. However, not all systems allow flexibility to add unique information to your business practices. For example, when managing cash inflow (Accounts Receivables), expected payments can be projected by categorizing them as “Promised Payments.”  Moreover, the ability to create a series of payment statuses along with selecting a date (calendar field) will allow for more accurate cash inflow reports beyond what the traditional age buckets offer. As a result, creating projections based on when your clients say they will pay you versus your payment terms can help avoid cash flow issues.

Tip 3: Increase Payment Methods – Both Ways

AP: Decreasing the time it takes to pay your vendors can impact relationships. The use of paper cheques has been steadily declining in Canada, shrinking by roughly five percent a year, according to the Canadian Bankers Association. Electronic payment has become ubiquitous with advancements in payment technologies that enable services like wire transfers, debit payments, PayPal and Bitcoin. Setting up EFTs and paying vendors with credit cards can help ensure your payments arrive on time or even early, which some vendors even offer discounts for!

AR: If your business doesn’t accept credit card payments, you are lowering your cash inflow and revenue opportunities. For example, taking credit cards and accepting digital forms of payment such as e-transfer and wire/bank transfers will significantly improve your cash flow. Credit card transactions are electronically processed and are likely to be settled quickly and deposited in your business bank account by the processor within days. As a result, providing both your clients and prospective clients with more options other than writing and mailing cheques will likely make them happy, as well as you!

Bonus Cash Flow Tip: Credit Card Payments are no longer an option

The benefits of accepting credit card payments extend beyond just improved cash flow. Spire is available with credit card processing throughout partner Payfirma. Accepting credit card payments with Payfima will:

  • Increase sales opportunities: Credit cards offer the freedom to move businesses anywhere the customer goes. Owners are no longer confined to store hours or a brick-and-mortar location. You can accept payments anywhere, anytime with a mobile card reader and/or online.
  • Improve productivity: Processing cash and cheques not only require more money but also takes more time. Time wasted with trips to the bank, managing accounts receivables and chasing cheques. When you accept credit cards, the process is automated.
  • Secures your responsibility as the merchant: Payfirma allows you to ensure that you are PCI DSS-compliant. Vaulting credit card information tokenizing and encrypting transactions, Payfirma makes sure that your business is not in violation of your merchant agreement. This service ensures your responsibility to your clients is intact.

Use the right technology wisely. Thinking outside the box and adopting flexible payment solutions both for your AP and AR are concepts that will help you manage your cash flow. So when we apply these simple yet effective cash flow tips, we can see within 30 days the difference.  Giving us more insight into our systems beyond just the debits and credits.

Click on these links for more information about Spire and Payfirma.


The Five Best Tips to Grow Your Business

There are five tips for growing your business that will help you get products to market faster, win more customers, boost your margins and deliver a superior experience to every stakeholder. Your competitors won’t know what just happened to them if you follow these five tips to grow your business:

1. Focus on the Customer Experience

As a rule of thumb, it’s seven times more expensive to acquire a new customer than to keep an existing one, so your business should be laser-focused on offering the best possible customer experience and encouraging your most passionate customers to become advocates and ambassadors for your business.

That means understanding what makes your best customers tick—what are their hopes, interests and expectations? Some businesses even go so far as to create customer personas that help them identify the specific types of people (ex. a single mother who works full-time and only buys premium products for her kids) that are the best customers for their business.

2. Keep an Eye on Your Cash Flow

One of the most important financial reports of any company is the statement of cash flows. It lets you know exactly how your company is converting cash into profits. Ultimately, cash flow is what lets you pay employees and vendors, pay off debts and invest in new equipment. If your business is burning cash too quickly, that could be an early warning sign that there are significant financial problems within your business.

3. Invest in a Reporting Analytics Package

Data matters more than ever in today’s hyper-competitive business landscape. With big data, you’ll be able to help you identify new customer segments, new niches, and new ways to expand. At the very least, it will give you a real-time look at how your business is performing and enable you to perform sophisticated report analysis.

4. Optimize Your Supply Chain

Just-in-time is the buzzword in inventory management and it’s a great strategy to increase efficiency and reduce inventory costs. If you have too much inventory (think of warehouses overflowing with products), you are going to tie up too much cash and impede the growth of your business. If you have too little inventory (think of nearly empty warehouses), you are going to have a very difficult time re-stocking your retail shelves. The solution is just-in-time inventory management, in which products appear exactly when they are needed. To make that a reality, you need to optimize your supply chain, so that products can make their way to your warehouse just in time.

5. Always be Innovating

In business, there’s no time to just stand still. You need to be constantly innovating, constantly pushing the envelope of what’s possible with your business. Think about what new products you can offer customers, what new niches you can explore, and how you can surprise and delight your customers.

By getting every part of your business—sales, marketing, finance, operations—working together seamlessly, you can guarantee the future success of your business, no matter how big or small it is.