Cash management is essential to your business’s success. You want to ensure that you have more money coming in than you do going out for expenses like salaries and accounts payable. Follow these tips to keep track of your finances and avoid any unwelcome surprises.

3 Best Practices for Cash Management

1. Give Incentives for Prompt Payment

If customers pay early, give them a reduced rate. This can help spur a positive cash flow if your business is going through a dry spell. For large orders or long-term contracts, don’t hesitate to ask for a deposit or partial payment. Finally, beware of extending credit. At the least, make sure potential clients interested in credit have the funds to pay by getting a credit report.

2. Arrange a Cash-Flow Cushion

Even if you’re having a slow month, you still have to pay suppliers and employees. You don’t want to be caught off guard by short-term cash flow problems. Have a line of business credit or a secured business loan on hand to cover you in these circumstances. You may be able to secure low-interest rates by using part of your business assets as collateral. This kind of arrangement is best made in advance; you don’t want to be scrambling for a last-minute loan.

3. Stay on Top of Cash Management

One way that business owners may end up with negative cash flow is if they simply aren’t monitoring it as they should. Even a short business trip can interrupt your day-to-day schedule and result in decreased oversight. If you don’t have time to reconcile your accounts and generate reports, enlist the help of a professional.

For experienced assistance with business cash management in Texarkana, TX, look to Erie & Associates, P.C. This accounting firm offers a comprehensive range of CPA services, including analyzing financial statements, providing cash flow projections, and preparing key performance indicators. Get a full overview of their business offerings online. To discuss your needs with an accountant or schedule an appointment, call (903) 792-6651.