Skip to main content
_FB_2018-Icons-finalized-cleaned-up_new_FB_2018-Icons-finalized-cleaned-up_newGroup 9
Back
Scroll to top

4 Ways to Get Started with Small Business Cash Management

Running A Business 4 min read

Ready to talk to an expert?

Like the gasoline that powers a car, cash is the lifeblood of any small business.

You need to keep track of cash throughout just as you would monitor the fuel gauge while driving. Because if you’re not careful, your business will quickly end up like a car running on fumes: stalled.

Cash management may seem daunting, but if you build a plan while your business is small, your cash supply will grow along with your company. Below are 4 ways to help you get started.

Know Where You Stand

Before you can improve your cash flow, you need to be able to know where you stand at any given time.

Be diligent about keeping track of all cash in and cash out — weekly and monthly – in order to stay on top of it. Your cash flow status should never come as a surprise to you.

Once you have a good grasp of how cash moves in and out of your business, you can begin to be strategic about how to make your money work for you.

Get Paid on Time

You can’t pay your bills if your customers aren’t paying you. Make your payment policies clear and put everything in writing. This could include penalties for late payments or discounts for customers who pay early. With everything on paper, there’s a smaller chance that surprises will arise.

Always invoice your customers as soon as possible and send reminders that payment is due. Don’t wait days or weeks. By waiting to invoice your customers, you give them less time to pay and increase the likelihood that the payment will be late.

Making it as easy as possible for your clients to pay you will help ensure you receive your money on time. Think about having an online portal/grocery cart and accepting as many forms of payment as possible. Consider drafting your client’s accounts, accepting gift, prepaid, debit and credit cards. Utilize mobile payment options (your smartphone or tablet can be used for credit card payments) like [permalink id=”1284″]PayFox[/permalink].

Use Your Money Wisely

Reducing expenses is a great way to improve your cash flow. Before hiring new employees, consider whether or not a freelancer can do the work, especially if you’re just starting out. This will eliminate significant and consistent costs including salary and benefits.

Go green by reducing the use of paper around the office; it’s another quick way businesses today are reducing costs. And not having to maintain an expensive printer or buy paper and ink will really add up.

Be strategic about the suppliers you use. While using only a few suppliers may allow you to get discounts, using multiple suppliers will often give you more flexible payment options since due dates will be spread throughout the month.

Often times, suppliers will offer discounts for paying in cash. Take advantage of this opportunity. Also, be sure to take the allotted time you’re given to pay suppliers. Most of the time you will have 60 to 90 days to pay an invoice. This serves as an interest-free credit line.

Don’t pay late, but unless they’re willing to give you a significant discount, try not to pay early either.

Prepare an Emergency Fund

Every small business will face the occasional bump in the road. It’s usually not a question of “if” so much as “when.”

Be prepared for these bumps by creating an emergency fund. Depending on your business, you will want to put aside enough to cover between 3 months to a year of business expenses.

To do this, first determine how much you want to deposit each month. Then, set up an interest-bearing [permalink id=”98″]business checking account[/permalink] for these funds.

Resist the urge to put these funds into the stock market. While a checking account may earn less interest, it will guarantee that the money is always available to you, should you need it.

Another option is for you to set up a [permalink id=”130″]business credit card[/permalink] that will give you the flexibility to offset some costs and pay your bills on a set schedule.

With these tips in mind, you can feel comfortable hitting the accelerator on your small business. Just make sure to keep your eye on the gauge.

If you’d like to learn more about cash management for your business, feel free to visit with a cash management specialist at a First Bank branch near you.

Ready to talk to an expert?

Share:
First Bank’s Good To Know Logo
Sign up for our newsletter and be the first to know about new tips, insights, and products from First Bank.
First Bank may use this email address to contact you about products, services, and promotions.

You may be interested in...

Man opening a coffee shop Four Tips Before Starting Your Business According to research from the SBA.gov in a 2020 report of small businesses, North Carolina had a total of 934,604 small businesses. And despite everything the last year threw at us, the number of new businesses in the state continues to grow as many have been tapping into their creativity\, making the leap from side business or unemployment to self-employment. If you’re exploring the idea of starting a business, you should know that in the first two years of a business’ life, an average of 68% survive. Then after five years, 49% of those are in business, and 34% make it to that 10-year mark. The trick to being one of those survivors? Be well prepared with the right financial tools. To help, we collected the following 4 tips to help you start your business off on the right foot. Consider where you want your business to go. Before you start, think about your daily life and understand your market. Why do you want to start your own business? Do you understand your industry or your customer base? What is your daily activity like? Do you have extra income? Think about your long-term goals. What risks are you willing to take? Then, think about your business idea. Do you have a business plan? How will you purchase necessities you will need to start out? Do you have a plan for growth? Answers to these questions will be different for every potential business owner, but making a decision on these topics may lead you to tip number two. 2. Get your finances in order. Start by making a budget for your business. Things to include might be the cost of supplies, equipment, rental fees for your storefront, travel, or anything else that is a requirement for your startup. Next, consider your initial financial goals for your new business. Establishing financial goals (annual, monthly, weekly, and even daily) can keep you on track if you are planning to open or accept customers in the near future. Need help sticking to the plan? Take our financial course on creating a budget, which teaches you strategies and tips to help you stay on track. 3. Consider how you will fund your business. Once you 5 min read
3 Major Factors of a Small Business Credit Card Comparison Conducting a small business credit card comparison can be a useful tool when looking for resources that can help your company. But there are many credit card options available to entrepreneurs, which can make it difficult to choose one that is best fit for you and your business. When choosing a small business credit card, the Wall Street Journal suggests paying attention to three specific aspects: Interest rates. Whether you plan to pay off your balance as soon as you make a purchase, or carry a balance on your card, interest rates are important. Some cards will have a teaser interest rate as low as 0% for the first year, and most credit cards will raise your interest rate for any late payments. Rewards benefits. Consider the rewards you will earn for making purchases. For example, if your company travels a lot, you might want to look for a card that offers rewards on gas or travel. Annual fees. Some cards charge annual fees—others don’t. Pay attention to the annual fee charges when choosing a card in order to avoid paying yearly.  With First Bank, you don’t have to spend all your time comparing credit cards. We offer one small business credit card with all of the features and benefits you need to run your business smoothly. No Other Credit Cards Compare Eliminate the hassle of credit card comparison with First Bank.* Our Mastercard Business Card with Rewards** does feature several benefits, including: 1.25 points for every $1 spent on qualified purchases Zero liability No annual fee 24-hour MasterCard Global Service® Purchase assurance MasterAssist: travel assistance MasterRental insurance Competitive interest rate Visit Your Local First Bank Today To learn more about our Mastercard Business Card with Rewards or other business loan options, contact or visit your local First Bank branch today. **See our Terms and Conditions for complete details on our One Rewards Program. Loans subject to credit approval. ——— Sources: Wall Street Journal: http://guides.wsj.com/small-business/funding/how-to-pick-a-credit-card-for-your-business/ 2 min read
First Bank logo
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognizing you when you return to our website and helping our team to understand which sections of the website are the most popular and useful.