The common saying “money talks” is no lie when it comes to business. Money is the lifeblood of a business, large or small. When your incoming cash flow is insufficient to your outgoing cash flow, your business is experiencing cash flow problems. This is a common problem small and large businesses struggle with.
Identifying and attacking your cash flow problems will help you save your business before it is too late. Check out these tips to see how you can solve your cash flow problems.
Assets Tied Up in Inventory
Having a large inventory allows your business to accommodate all expected future orders. Putting your money toward a large inventory is worthwhile if there is a high demand from your customers. Get familiar with what sells quickly or more slowly than others within your business. Inventory that exceeds demand leads to a loss in sales, which then results in lost profit.
Your business will not grow if sales are not met. Identify any changes that need to be made to your order cycle to ensure that you are reaching sales and profit. There are many free resources offered to businesses to utilize proper inventory management.
Unable to Pay Debts
It is common for businesses to receive loans to temporarily fix their cash flow problems. What businesses with cash flow problems need to understand is that if you are not profiting, or if you are experiencing other money issues, how are you supposed to pay off your loans? Loans and other debts come hand-in-hand with interest. These fees add up over time, and being unable to pay debts presents even more cash flow problems than you initially had.
Low Sales
Sometimes, low sales can be out of your control. Whether it’s the time of the year or the economy, not making sales becomes frustrating and can be detrimental to your business. If sales are low due to a factor out of your control, strategize a way to gain more customers and/or sales, such as lowering prices.
Avoid Cash Flow Problems with Marc Egort, CPA
Struggling with money can be very stressful. With the correct business and accounting services, you can avoid cash flow problems at all costs. Contact Marc Egort, CPA, to get help with your cash flow problems today.