Updated: Sep 12, 2022
For a small business, managing cash flow is critical. Of course, the big idea is that the cash that comes in should be more than the cash that goes out. Here are some strategies to help keep you on track.
Instead of paying bills at the same time every month, consider spreading out bill payments to match up with cash receipts.
Sort and pay bills by due date and priority.
Take advantage of early payment discounts if you can.
Paying your employees is one of the largest expenses your business has. Set up your payroll cycle to coincide with your cash receipts.
If your cash receipts happen once a month, so should your payroll.
Bill promptly, make sure customers receive the invoice, and follow up if payments are late.
Make it easy to get paid: offer online or phone payment options.
Don't continue to work with customers that don't pay you.
Get a line of credit
A line of credit can help bridge gaps in your cash and help you handle suprise expenses. If possible, have the line linked to your business checking account. This way you protect against overdrafting the account.