Need Help With Cash Flow? Try These Tools




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January 2, 2019

This article is Tax Professional approved


Almost half of small business owners are kept up at night worrying about cash flow. And it’s no wonder—maintaining a positive cash flow is what keeps your business afloat. A study from US Bank shows that of businesses who fail due to financial reasons, 82 percent fail as a result of cash flow issues.

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This article was written by our friends at Square.

Managing cash flow isn’t just about having enough funds in the bank to run your business. It’s also about timing when funds hit your account, knowing sales patterns, and determining when it’s best to invest.

Fortunately, there are tools to help with all of that. Here are five that make it easier for you to stay in control.

Analytics tools

Your data is extremely powerful—it’s what will help you make the smart decisions that keep your business moving. Square Analytics show you how business is going, both at a granular and a much broader level.

You can examine the seasons, months, days, or even times of day you typically ring in the most sales, which products or services are your best performers (and worst), and how your staff is performing. This type of information can be instrumental in making strategic decisions that impact budgeting.

Bookkeeping services

You started your business to do something that you love—not to spend time bookkeeping. Still, keeping clean and precise books is essential for cash flow. If you don’t know where exactly your money is going to and coming from, you can’t manage it. Fortunately, there’s services and software that can help you on that front.

Bench, for instance, provides small businesses with access to bookkeepers that prepare monthly financial statements and expense overviews that give you the actionable insights you need to grow your business. They also make tax season less stressful.

Scheduled deposits

It’s one thing to know how many sales are coming in each day—it’s another to know when that money is going to hit your bank account. You should try to work with a payment processor that allows you to schedule your deposits so there’s always cash in the account when you need it.

For example, you can customize your deposit schedule to occur just after the close of your business day. That way, if you’re open until 6PM on weekdays and 8PM weekends, you can assign each day’s deposits to hit your account when it makes sense for your business. Square even allows you to deposit your funds instantly, so you don’t have to wait.

Inventory management software

Managing inventory plays as much of a role in maintaining cash flow as your sales do. Poor inventory management—like ordering too much or not being able to fill orders—can put a kink in your cash flow.

But inventory management doesn’t have to be a pain. By using a point of sales with integrated inventory management, you can easily track what’s in stock and what needs ordering across multiple locations, and set up alerts so you’re never caught off guard.

Digital invoices

If you invoice customers on a regular basis for products or services, then keeping your cash flow healthy means collecting on those invoices promptly. That’s where digital invoices come in.

Not only do digital invoicing tools allow you to quickly create custom invoices, but they also allow customers to pay online (instead of over the phone or by mail). If you use a tool like Square’s, then you can also set up automatic payment reminders and schedule recurring invoices, which can help you cut down on late payments.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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