Managing accounts and finance departments has always been an uphill task for small businesses. However, the biggest challenge that these small organizations face is to improve cash flow by following all the rules and regulations defined by the International Financial Reporting Standards (IFRS). They can control it only when they have a professional tax accountant NYC in their organization or hire tax consultants NYC to manage their accounts.
- Mainly, the biggest concern for the companies is related to improving cash flow before payroll day. Sometimes, they find themselves in a crisis when identifying a large expenditure. These reasons become a cause for startups to close their business immediately. Generally, these small companies need cash at least three quarters of the financial year to help improve inventory, expansion, liquidity, and equipment purchase. They need extra cash for paying salaries and wages, contingency planning, and research.
- When these small businesses find cash issues, they implement necessary measures to run the operations. However, if they have not managed their cash flow yet, the chances of failures remain there. Generally, they can manage it with bookkeepers in NYC. However, it does not work if they do not have professionals in tax preparation NYC.
- The good news is that you can learn different techniques and methods to improve your cash flow. Here, we will mention some very crucial techniques and steps to improve cash flow successfully.
Let us explore them!
Receivables
First of all, we need to understand how to improve cash flow of receivables. Here is a list of tasks:
- Many small companies delay in invoicing customers. We recommend invoicing customers promptly. The reason is that this step keeps them on their toes. Additionally, send them reminders before the due date.
- Use technologies like email, Skype, WhatsApp, and other electronic tools for sending invoices instantly.
- Adopting fast payment methods like ACH and credit cards is a perfect solution to get payments in time. This technique specifically matters when you receive recurring payments.
- Make sure that you have deposited all your payments immediately. Some companies have specific days for this activity. However, it is not beneficial. Using newer banking methods can be the best option for you.
- Make your invoices easy to understand. Clearly mention the instructions related to payment submission. Also, tell the due amount against the task with the due date. If you find some ambiguity in the invoice, revise it now!
- Follow the instructions while preparing the invoice for government agencies, large companies, and nonprofit organizations. They generally give you instructions, and you need to follow them strictly.
- Give your customers numerous options to pay you without thinking much about choosing a payment mode. You should allow them to use any credit cards like Visa, American Express, Discover, and Master Card. Also, allow them to use payment channels such as Apple Pay, Google Pay, Amazon Pay, PayPal, digital wallet, or anything else they prefer.
- Offer discounts to your customers if they are agreed to pay early. It works exceptionally well when you offer these discounts to large organizations and government agencies.
- You must be very critical in collecting the right sales tax amount. Do not take it lightly, as you will bear the loss if there is any mistake in the invoice.
- If one or some of the payments are not received, take it seriously and pay attention to it. The best practice is to initiate a process through which you can get the payments immediately.
- Keep an eye on credit card expiries and apply immediately if they are near to expire.
- Develop a credit report in which you can mention all those vendors who are granted credits by you appropriately.
- You also need to cut off services if some customers do not clear your dues timely. Mention a time frame in the contracts.
- You must have correct contact information to send the invoices to the current address timely.
- When you receive payments, record them in the system to avoid ambiguity after due notice.
- If some customers have multiple outstanding invoices, send them monthly statements.
- Prepare a receivable aging report regularly and take action or focus on those accounts where you need attention.
Payables
Now, let us go through steps to manage payables efficiently!
- Recording all the bills is necessary to track the due payment. Generally, we need to use an accounting system to manage it.
- Also need to incorporate all credit card feeds in case of using a credit card for making changes.
- Keep business expenses separate from personal expenses.
- Try to use a separate credit card for business payments. If you do not have such a card, start using one of your personal credit cards for business payments.
- Make credit card payments every month to avoid higher interest rates.
- Tax accountants NYC recommend making payments when the due date comes. It will help you stretch your cash. Good accounts payable software helps you achieve this target.
- When someone allows you to get discounts on early payments, avail of it.
- Try not to pass the due date to avoid late fees and surcharges.
- Allow purchases to all when they get approvals. There must be no relaxation to anyone, whether an office boy or an owner.
- In case of not pay a specific amount, try to negotiate with your vendors.
- Use a suitable payroll system to clear payroll taxes timely and avoid penalties.
- Keep tax accountants NYC engaged in checking all purchase invoices and recording all the products and services, a company has been receiving.
- There must be a system to avoid creating duplicate bills.
- Develop control of your stock and keep all unauthorized away from it.
- Observe your signature card regularly while managing your bank account. If there is any unauthorized individual, remove him immediately.
- Develop a calendar for annual contracts. And before ending a specific contract, re-negotiate with the stakeholders 30 days before the end of the contract.
- With the help of bookkeepers in New York, make tax projections for the whole year in case of not getting a tax bill.
- Pay the loan installments timely to avoid any surcharge.
Final Words
We have discussed some key steps to improve cash flows with the improvement in accounts receivables and accounts payables. We are hopeful that these steps will help you manage cash flow more authentically and efficiently.
Author Bio
Villie Walters Ramirez is a 32-year-old sales assistant at a tax king who enjoys accounting, NYC Tax Extension Services, and bookkeeping. She has a post-graduate degree in accounting, and she has a severe phobia of cats. She enjoys traveling A lot.
