Keeping Your Business Cash Flow Under Control During Tough Times

heap of united states dollar bills and calculator

The last year has been incredibly hard for businesses of all types and sizes. Even big, established brands have had to make changes to ensure that they can move forward from the devastation that the worldwide pandemic has caused. Keeping your cash flow under control is one of the main things businesses who want to survive tough times will need to focus on. Here, we’re going to take a look at what you can do to make this happen and guarantee your future success. 

heap of united states dollar bills and calculator
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Make Productive Staffing Decisions

The first thing you’re going to need to do is make productive staffing decisions. Look at your cash balance and figure out how many payrolls you’ll be able to take care of if your revenue begins to dry up. Your team is your most valuable and important asset. Downsizing might seem like an inevitable choice, but there may be alternatives you can look at instead. Could you reduce work hours, rather than reducing salaries? Asking a team member to work the same amount for less money will likely cause resentment and other problems within the business. 

Other ways to potentially cut costs include eliminating overtime, voluntary retirement offers, and temporarily placing full-time employees on a part-time status. These options can be better than the alternative of letting people go. 

Ensuring Transparent, Constant Communication

Covering up the issues you are having will only do your more harm than good. Ensuring transparent, constant communication with the relevant parties will make your life easier and could lead to more opportunities to get things in order. Speak to your bank, your suppliers, your customers, and any other relevant party. Your suppliers may still be willing to provide your welded pipes, equipment, tools, or whatever it is you need if you are transparent with them. Explaining the measures you are taking will ensure you’re all on the same page and that you manage to keep the trust you have built over the years. You’re also less likely to lose staff and customers if they understand what is happening. 

Effective Cash Management

Effective cash management includes controlling the amount of team members you have, ensuring you’re vigilant when it comes to expenditure, and looking for cash in places you may never have expected to find it. Encouraging people and companies who owe you money to pay up could be a way to do this. 

If you’ve been waiting a long time for certain people and companies to pay, asking a company to take over the collection of them, so you get immediate payment and they take on your risk could be an option. Just bear in mind you may be sacrificing the relationship if you do this (although this may not be a problem if they never pay on time and don’t seem to care about the relationship). 

Deferring Your Credit PaymentsAgreeing to deferred payment measures with your creditors could be beneficial – and this could be easy enough to do if you have spent time creating solid relationships with them.

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