Managing cash flow is always an important part of managing and growing a business, but for SMB’s it presents a unique challenge that their larger brethren can often-times avoid. Mid-market and large corporations typically have ready access to cash that SMB’s simply don’t have. They also have tools in place to manage cash that SMB’s lack.
The U.S. Small Business Administration agrees that cash flow is critical to growth. A recent article posted on the SBA website is right on point, How Net 30 Accounts Help Conserve Business Cash Flow, by Marco Carbajo. Mr. Carbajo writes:
“For every business, the cash flowing into a company is essential for covering the day to day expenses necessary to operate a business. It keeps lights on, and doors open; cash flow is truly the life blood of a business. Unfortunately, it’s not uncommon that companies of all shapes and sizes have to slow business growth due to lack of cash flow needed for expansion.
To combat this, a business owner may increase the amount of cash coming in by generating more sales and converting those sales into cash as soon as possible. Another way is to conserve the company’s cash flow.
While there are many ways to conserve cash flow such as cutting costs, bartering, re-negotiating with creditors, and cutting inventory; one method in particular is through Net 30 accounts.
By asking for credit terms from your suppliers you enable your business to hold onto cash for a longer period of time. You can obtain products and services your business needs and defer the payment on those purchases for 30 days, thereby conserving cash flow.
This is called a “Net 30 account”. Read more…
At Expex, we make it ours and created an app to give your business:
Improved Cash Flow.
Carly is the last bookkeeper you will ever hire. Carly works like a person (or team of people) to provide you with the information you need to complete the tasks that require your immediate attention, make better financial decisions, and run a healthier company. Carly is smart, efficient, and always a step ahead.
Carly makes managing your cash flow simple and easy. Doesn’t that sound great? Give us 20 minutes. We will show you how it’s done, and how easy it can be to manage your cash flow.
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Special thanks to the SBA and author Marco Carbajo for his wonderful insight on cash flow.