by Pete McAllister | Accounting News, Business Growth, News
A positive cash flow—when more cash is flowing into your business than out of your business—is a sign of financial wellness and efficient management. It is a vital piece of the puzzle to sustaining long-term growth. Read on for some strategies to help maintain a positive cash-flow.
Plan Ahead
Implement a cash flow projection. This is a basic spreadsheet that you can use as a general guide for forecasting cash flow. It will help to realistically estimate when money will be coming into the business, when it will be going out, and what you’ll have remaining once expenses are accounted for and income is recorded. The key word, however, is estimate. While it isn’t meant to be a precise projection, it should help you anticipate your cash flow for the coming months.
Knowing ahead of time if a cash shortfall is in the forecast will allow you to perhaps negotiate upcoming payment dates or even obtain a loan before that deficit is realized.
On the other hand, if a surplus is projected, take the opportunity to set funds aside for future deficit periods. A projected surplus might also be the right time to invest in the following:
- Employees: If retaining knowledgeable and valuable employees means offering raises or bonuses, the investment is worth it. The expense would likely be less than hiring new staff, not to mention the time investment of training new employees.
- Technology: Look for ways you can automate and simplify processes with technology. Depending on your business, this could mean establishing a remote-work infrastructure, focusing on higher-value business goals, or promoting efficiency through operational changes.
- New opportunities. You can’t predict when unexpected opportunities and prospects for growth will come along, so take advantage of these opportunities when you’re in the position to do so.
Invest in Accounting Skills
In order to stay current on the status of your cash flow, basic accounting skills are non-negotiable. If payables and receivables, inventory, debt, and cost-and-profit aren’t your forte, be willing to take a course in business accounting or find a way to implement hiring an accountant into your budget.
Keep Track of Cash Flow Daily
Sales and revenue may command your interest and attention, but daily cash monitoring will help you avoid unpleasant surprises. Use your cash flow projection to know your projected cash flow for the next 30 to 60 days. Daily check-ins will allow you to catch any downwards trends and take action. Follow up on overdue invoices, scale back on any non-essential purchases, and make any needed adjustments to get your cash flow moving in an upward trend.
Boost Receivables
A solid (and probably obvious) strategy to increase cash flow is to increase sales with established and new customers, but business growth takes time. In the short term, try these methods to incentivize clients to pay sooner:
- Generate and send out invoices as soon as possible
- Offer discounts for quick payment
- Follow up with customers who tend to stall payment
Continually Aim for a Healthy Cash Flow
Managing a positive cash flow prepares your business to adapt to changing market conditions, fluctuating economies, and periods of growth as well as stagnant seasons without needing to rely on loans and investors. Once your investments are consistently heading in the right direction, a positive cash flow should gain momentum and spur a rhythm of sustained company growth.
by Daniel Kittell | Accounting News, Industry - Construction, News
Payroll is often one of the most complex administrative tasks for a construction firm. At any given time, you may have employees at differing pay rates working across a range of job sites. By streamlining your payroll process, you will save time and ensure that employees are getting paid accurately and on time.
Implement Digital Time Tracking
Payroll processes done by hand, such as moving data from timecards to payroll software, are time consuming and allow for error. Try implementing digital time tracking in place of handwritten timecards and spreadsheets. This will help to slash time, cut down on manual error, and eliminate the task of interpreting handwriting. Catching and fixing errors, like missing hours or break time, is also easier with digital time tracking.
Many time systems have progressed in modern offerings such as geofencing, which improves labor cost data and employee accountability. Construction firms that do government work can log work classifications, verify wage decisions, and manage reporting more efficiently.
Establish a Reliable Payroll Checklist
Make a step-by-step checklist that includes each task in the payroll process. These tasks typically cover:
- compiling hours
- double-checking data
- pay and withholdings
- distributing funds.
Firms that do prevailing wage work must also manage:
- verifying wage agreements
- work classifications
- handling fringe benefits.
Cross off each task as it is completed and make a note of any problems that cropped up, then you can review your process and make changes for improvement.
Streamline Technology
If your company uses multiple platforms for various administrative tasks, you are likely creating more work and more room for error. For instance, be sure you are using a digital time and attendance system that exports out to a payroll and reporting system. This eliminates the extra work it takes to transfer the data. There are also platforms designed to handle the specific tasks associated with prevailing wage work.
Limit Preventable Mistakes
With a lot of variables to keep track of in the payroll process, your goal should be to focus on limiting preventable mistakes. Try making a list of the most common payroll mistakes you’ve noticed, and double check those areas before finalizing payroll.
The payroll process is easy to overlook until something goes wrong and you waste valuable time and resources trying to correct errors. An efficient and accurate process can promote compliance, reduce risk, and lay a foundation for growth.
by Stephen Reed | Accounting News, Industry - Veterinary Medicine, News
Clients consistently turn to veterinarians for advice and assurance on products, pet food, and pharmaceuticals for their pets, so a retail business that can add to your clinic’s bottom line is a natural step for many. Below are some tips to help implement a retail business for your practice.
Be Selective with Products
Evaluate your product offerings and determine which ones move quickly. Focus on items that are backed by your medical team, turn over quickly (less than six months but ideally in a month or two), and are favored by clients. If you routinely recommend over-the-counter products during appointments, have them accessible for your clients to take home that day. Limiting choices to what your team specifically and commonly recommends helps to manage inventory and develop trust with clients. Even in the case of products that clients can buy at a pet store or grocery store, like Nylabone chews or nail trimmers, if they are readily available at their vet’s office, clients are typically happy to check that item off their list and support a small business in the process.
Implement a Loyalty Program
Consider implementing a loyalty program where clients receive a “freebie” when they reach a certain dollar amount. These freebies could be an account credit, a service such as a free nail trim, or a product that retails for under a certain threshold. This is a simple strategy to boost sales in a way that will help staff guide clients to products that they would likely buy anyway while helping them reach their dollar goal for the loyalty program.
Keep It Focused
Keep it small in the beginning by viewing your retail offerings as an expansion to the services you’re already providing. Focus on stocking products that are important to your clients and esteemed by doctors and staff. This approach will help garner more repeat clients, more foot traffic, and a better-established relationship with clients.
In addition to over-the-counter healthcare products and general pet merchandise, be sure not to discount in-clinic pharmacy sales. Veterinarians do the work of attending conferences, communicating with drug manufacturers, and determining which products are best for their clients and pets. Instead of directing clients to drugstore pharmacies or, worse, online sites where they could unknowingly purchase less-than-ideal products to save some money, why not stock the products you’re recommending? This isn’t to say you should stock every product ever mentioned in every appointment, but it should be fairly easy to run some reports through your software to determine which products have the highest turnover. This will tell you which products are important to have on hand for customers.
The Bottom Line
Though you may not be able to increase your cost more than 35% of wholesale value in order to be in range with competitors, a positive cash flow on product sales is worth it in the end for your bottom line. Perhaps most importantly, clients and their pets are getting exactly what they need from the veterinarian they trust.
by Stephen Reed | COVID-19, Industry - Retail & Distribution, News, Retail & Distribution
The COVID-19 pandemic altered the way Americans shop. It also affected the way retail businesses reach customers and position their businesses for growth and prosperity. Looking forward, some of these changes are likely to stick around. Here are the trends small businesses in the retail industry can likely count on for the foreseeable future.
Online Shopping
Online shopping was certainly not a new concept when the pandemic hit, but nationwide lockdowns forced more consumers to shop online, and accelerated the rate at which business owners opened e-commerce sites. The shift to more digital business is likely here to stay, even as the world economy begins to recover. A recent study conducted by the United Nations Conference on Trade and Development (UNCTAD) and the NetComm Suisse e-Commerce Association found that online sales have increased across the majority of product categories. This suggests that consumers are increasingly content to shop online, and retail companies with dedicated e-commerce presences will be able to thrive in a post-pandemic era.
The Effect of e-Commerce on Brick-And-Mortar Stores
Retail strategist and experiential designer, Melissa Gonzalez, believes brands and retailers will be taking a close look at the role of physical stores.
“Capital allocation will have a tiered process where flagship destinations will exist in locales where there is evidence that a physical presence is justified or critical 12 months a year,” Gonzalez said. “Flagship locations will be complemented with smaller-format, specialty locations anchored around a specific purpose or localized effort. Partnering with department stores will also continue to be reimagined as they restructure and reposition as collaborative marketplaces, and there will be a deeper dedication to pop-in-shop retail.”
Tech Upgrades
The pandemic ushered in new safety requirements, changing regulations, and unpredictable staff availability. These changes are leading companies to think about tech-driven solutions that can support growing requirements and evolve with their business. Some of these tools include mobile payments, online shopping, and mobile scheduling. While the pandemic demanded the urgency of customer-driven solutions, like convenience and touchless transactions, they are proving to increase efficiencies as well as customer and employee experiences, and they are likely here to stay.
Personal Shopping Services
The role of a personal shopper, where a store employee shops for a customer, isn’t a new concept, but more retailers implemented this service to compensate for the loss of foot traffic during pandemic lockdowns. While this method is being embraced across the board, personalized experiences are especially well-suited to local and small retailers, who have an opportunity to lead the industry in this area.
Pricing Automation
A number of factors go into determining an item’s price, but more retailers are depending on automated technology to establish proper pricing. Expect to see more and more automation solutions implemented for small businesses, such as online pricing automation and inventory management systems.
Social Media’s Role
The pandemic accelerated the need for retailers to reach consumers through online and mobile-friendly methods. Social media is a major stimulator of online sales, and consumers want to interact with brands through these platforms. Experts even suggest that hashtags and memes could be just as effective as traditional advertising avenues. Small businesses should think about creative social programming to boost online shopping through avenues like shoppable TikTok and Instagram. This is especially important to reach and maintain younger consumers.
by Pete McAllister | Accounting News, COVID-19, Industry - Professional Services, News, Professional Services
The pandemic lockdowns led to many professional service firms closing doors and, wherever possible, moving staff to home offices in anticipation of a temporary mode of operation. One year later, however, health safety concerns and economic uncertainty are still prevalent, prompting firms to think about a “new normal” post-COVID-19. This article covers some important points to consider as the economy begins to recover.
Cash Flow and Liquidity
If the past year has proven anything, it’s that fiscal resilience is imperative, and that likely isn’t changing anytime soon. Preserve cash, review capital investments, and cuts costs where possible.
Things to consider when thinking about cash flow:
- Assess works in progress and make any necessary changes or improvements in the areas of management and billing.
- Review and improve upon, if necessary, your accounts receivable system
- Analyze upcoming projects with a keen eye to scaling back on staffing, keeping in mind the risk of potentially losing key workers and talent.
- With social distancing guidelines in mind (and not knowing what the future looks like in regards to this), aim to reduce costs by reassessing real estate needs, existing office space, and places where you might be able to consolidate. This is especially important if some or all of your staff will be switching to permanent remote work model.
Things to consider when thinking about liquidity:
- Work out an agreement with leases. If your firm is in a financial position to remain in your current space, think about negotiating your lease renewal early and possibly extending it. Depending on circumstances and the current state of your space, you could approach discussions by offering free or reduced rent in exchange for tenant improvements.
- Review your lease for tenant improvements. If your lease provides an allowance for tenant improvements, it may be possible to negotiate the elimination of that allowance in exchange for the cash value or rent credit.
- Rent relief may be an option. Typically handled on a case-by-case basis, financial statements may be required to determine need.
New Opportunities and Growth
If your firm is in the position to be able to jump on new opportunities as they become available, don’t delay. Once your cash flow, liquidity, integrated technologies, and business processes are in good standing, develop a game plan for organic growth and expansion into new areas, including acquisition. Be mindful of how the increased demand that comes with growth can potentially burden each department, and have a plan in place to deal with the increased demand.
You’ve likely had to lay off or furlough valuable workers over the last year. If staffing shortage has prevented you from exploring new ideas and establishing new business practices, check the state of your cash flow and liquidity to see if now might be the time to expand your organization’s talent and expertise.
IT and Communication
With a year of pandemic life behind us, you probably have a good idea of how to move your firm forward in the future. If a remote working model has worked for all or part of your staff, you might decide to make it permanent. Be sure that your IT and cybersecurity infrastructure are up to date. Also evaluate methods of communication so that staff can easily and securely communicate with clients and each other.
Whether or not you foresee changes brought on by the pandemic as affecting lasting change to your business, one thing remains true: the key to success and growth is knowing the specifics and statistics of your organization in order to make wise decisions that will optimize business outcomes.
