DIY : 5 Simple Ways Contractors can Improve Their Cash Flow
Cash flow is the lifeline to any given business.
Cash is the fuel that runs your business. You would never drive a car without a gas gauge, so why risk running a business not knowing whether or not you are out of cash?
If you are not tracking your cash flow, you are leaving yourself open to the “cash trap” — the inability to grow your business.
If you are currently running jobs that are profitable but not collecting payments on them, you won’t have the cash available to pay the daily expenses and bills. Don’t forget: your cash flow is what will get you through the slow season!
To stop cash flow leaks and get control of your bank account, follow these 5 easy-to-implement strategies:
1. Forecast Your Cash Flow
In a small business, money is constantly coming in and going out of your bank account on a daily basis. If you can’t predict when money is leaving, you are welcoming chaos and stress through your doors. Much like planning out an upcoming project, it is extremely important you plan out your cash flow to ensure you are successful. Many contractors are often hit by bad debt or the cash gap when they least expect it, so being prepared for these scenarios is your first line of defence.
- Step #1 is making sure all of your invoices and estimates are being tracked. After all, it is very difficult to plan for the future if you can’t get a handle on day-to-day finances.
- Step #2 is assessing where your cash flow will be in the near and far future. It might sound difficult, but it is one of the easiest things a business owner can implement. Joist QuickBooks integration is an easy-to-use sync feature that allows you to see when and where money will be tight so you can proactively prevent cash flow gaps.