There’s no doubt that the pandemic has changed workflow for millions of businesses. Unfortunately for restaurants and some other service providers, there was little opportunity for remote work options, and added to that were restrictions on capacity and hours. But other businesses, like accounting, engineering, architects and other professional services firms, were able to make moves that enabled them to remain in operation even during the most trying months. And even after vaccines make it to market and American and global businesses return to more normal operations, the workflows at these businesses will be forever changed.
While many professionals will surely return to traditional offices and shared workspaces, the rapid shift to remote practices will not totally recede, as some workers remain remote, and businesses are more open to even new hires being remote. And this will continue to impact how every part of a firm operates, with increased reliance on technologies that encourage online collaboration, remote management, and streamlined processes.
Cashflow, ever a concern for both small businesses and the accounting firms that represent them, will continue to be a core focus as firms help themselves and their clients ramp up as the economy reopens. Having a cashflow plan can help these entrepreneurs better control the ebb and flow of business activity.
Here are three tips to help your firm or clients achieve a more manageable cashflow strategy.
Know the Business Climate
The weather is what’s happening outside your door. The climate is what is happening everywhere over a period of time. Understanding your business’ (or your client’s) business climate is similar and is essential to understanding and predicting cashflow. Aside from the pandemic, even in normal times, many businesses face cyclical changes. These can be seasonal for some businesses, or based on economic factors facing their community.
College towns see more retail during the school year; vacation towns during the summer; ski resorts, outdoor restaurants, sports retailers, and other businesses often have these predictable and projectable cashflow seasons and dry spells as sales volume surges or ebbs. Business managers need to keep these top of mind when planning and borrowing, making capital upgrades, adding new staff, or when considering other spending issues. Likewise, there may be seasons when supplies or wholesale costs are lower, which can be advantageous if the business can stock up during this time.
Keep an Eye on Financials
Since cashflow may frequently change, keeping open to periodic changes in workflow may be necessary to cope with it. Keeping accurate and up-to-date financials will help businesses keep an eye out for potential up and downturns, helping them be prepared for changes, if necessary. Proactively monitoring cashflow reports can also help when making business growth and other financial plans.
Avoid Cash Flow Crunchers
Expenses are an everyday cost of business, but managers should review them periodically or negotiate to ensure they aren’t missing out on lower costs or alternate suppliers. The same goes for payment conditions and even seeking lower APR credit cards or more amenable grace periods. Conversely, credit cards with rewards can be beneficial in some cases, especially for those with frequent purchasing needs. Businesses can also avoid costly late fees by using automated bill payment systems.
Accept Electronic Payments
One of the quickest ways to get cash into your business faster, is to make it easier for your customers to pay you. Surveys have shown that up to 70% of customers will pay or schedule a payment on the same day they receive their invoice, if there are electronic payment options. Advanced billing and practice management systems, such as BQE Core with AffiniPay, include integrated options for accepting echecks and ACH payments from customers, as well as the ability to set up recurring automatic payments. This not only speeds up payment, but also reduces manual processes and the potential for fraud.