How to streamline cash flow for small-business success
Next to a business plan and a mission statement, cash flow management is one of the most important elements of small-business success. With well-managed cash flow, a small business can more easily weather financial challenges such as unexpected expenses or a slow sales month.
While a small business can do wonders with an Excel spreadsheet, several tools offered by major and community banks, including Oklahoma City’s Quail Creek Bank, help make the inflow and outflow process more efficient. More efficient cash flow means more cash on hand that your business can use to grow and prosper.
Best practices for cash flow management begin with regular cash flow projections. These projections factor in customer payment history, upcoming expenses, vendor billing cycles, and receivables. Annual projections help businesses understand the big picture, while quarterly, monthly, or even bi-weekly projections help businesses know when to ramp up sales efforts or reign in spending.
Manage payables and receivables wisely
The most critical cash flow management elements include payables and receivables. For payables, keep a close eye on costs and hang onto cash as long as possible. Waiting to pay invoices close to the due date means you’ll have that cash on hand if you need it, when you need it.
Many banks offer products that allow businesses to make payments efficiently and avoid unnecessary complications. Same-day domestic and international wire transfers make payment to overseas customers quick and easy. Business bill pay allows a business to pay bills online, arriving in the vendor’s account faster than the post office could deliver payment. ACH credit origination allows businesses to pay federal and state taxes, pay suppliers and vendors, and make direct deposit payments to employees. This allows businesses to more easily forecast cash flow. And employees will appreciate direct deposit!
Positive pay, offered at Quail Creek Bank, allows customers to make sure that their checks arrive at the bank exactly as issued before the bank pays them. The bank can stop payment of unauthorized checks before they go through the system, which eliminates unnecessary hassle.
For streamlined accounts receivables, invoice promptly and track receivables diligently. Consider deposit requirements for certain clients (especially historically slow-paying clients).
A variety of banking services help small businesses get payments into their bank accounts as quickly as possible. Remote and mobile deposit allows businesses to deposit funds from anywhere—no trips to the bank required. Merchant processing allows small businesses to accept credit and debit card transactions, which puts funds in the business account right away.
For a small fee, many banks, including Quail Creek Bank, offer lockbox processing. With this service, the bank picks up your mail, makes a daily deposit, and lets you know how much money it deposited into your account. ACH credit originations allow businesses to collect payments from vendors via the ACH network. Businesses can allocate fixed or variable dollar amounts to be transferred from the vendor or customer account to the business account. This means reduced billing costs, faster collection, and more control.
To streamline your cash flow management, talk to a bank that understands the needs of small businesses. Quail Creek Bank, based in Oklahoma City, offers a wide range of products to help you manage the funds that flow in and out of your account. From wire transfers and bill pay to ACH origination and mobile deposit, Quail Creek Bank offers tools to help small businesses succeed.