One major part of running a small business is having access to cash when you need it to cover expenses or invest in your growth. Even when you have a sound cash management strategy, keeping cash easily accessible can pose a problem. The following suggestions can help you improve cash flow, so your business needs won’t be offset by a lack of readily accessible funding.

4 Ways to Bolster Your Cash Management Strategy

1. Consider a Short-Term Business Loan

If your company’s financial projections show promise but you need extra cash presently, a short-term business loan may be the answer. Like short-term personal loans, you can expect to pay a higher interest rate on the money you borrow. However, since the loan must be repaid in a shorter period of time, you’ll pay less in interest than you would on a loan with a longer repayment plan.

2. Get a Small Business Line of Credit 

If you’re just looking to improve your overall cash management options, a small business line of credit may be the answer. This is similar to a homeowners line of credit in that you’ll be pre-approved for a limit in relation to the equity you own in the business, but you will only be charged interest on the amount borrowed. You can continue borrowing and repaying over the life of the business; as the business equity grows, you’ll have access to more credit.

3. Reduce Overhead Expenses 

You don’t need an accountant to tell you that paying less for expenses will leave you with a greater profit. You can boost your access to cash by evaluating overhead costs and looking for ways to cut back. For instance, it may be beneficial to switch to energy-efficient light bulbs and other energy-saving equipment. Along with looking for expenses to cut, look for cheaper alternatives. You can shop around for the best wireless deal if you supply your staff with business cell phones, or search for a cheaper internet service provider.

4. Eliminate Non-Payment Problems 

Depending on the type of business you manage, non-payment or late payments from customers may be contributing to cash flow problems. There are a few ways to resolve this issue. Try offering an incentive, such as a 2% cash back offer to customers who pay within 10 days of invoicing. You should also limit who can qualify for financing. Customers with bad credit or poor repayment histories should be required to prepay for services and products.

There may be more ways you can improve cash management in your business. Erie & Associates, P.C. is a Texarkana, TX, accounting firm that offers financial management services to improve the solvency of your business. You can speak directly with one of their professionals by filling out their online form or by calling (903) 792-6651.