10 techniques to assist you manage and/or enhance cash flow.
Almost every business I know controls cash quite tightly and all appear to have their own approach.
But here are 10 techniques to assist you manage and/or enhance cash flow.
1. Monitor your funds on hand.
This meaning includes money that has come in and may not have been put in QuickBooks yet as well as payments that have not cleared yet.
If you are good about entering transactions in QuickBooks and take advantage of the Online Banking option in QuickBooks, then this would be helpful.
2. Reconcile your bank and credit cards monthly.
Do not rely on only downloading transactions from the bank.
I have seen transactions skipped or duplicated for a variety of reasons, so be sure you go through the reconciliation procedure (clicking on the Matched button will speed up this process) (clicking on the Matched button will speed up this process).
That will assist make tracking your funds in step 1 more accurate.
3. Review your Statement of Cash Flows - (Reports> Company & Financial).
4. Monitor Accounts Receivable closely.
a. Besides the A/R Aging Reports, you might also want to look at the Average Days to Pay (a new report in V2011) (a new report in V2011).
This will allow you rapidly see who's slow and who's fast - and wouldn't it be good to have more fast-paying clients!
b. I like to include the columns Overdue and Days Overdue in the Customer Center - it's a quick visual way to monitor.
(Right-click, select Customize Columns, then select those 2 columns)
5. Make it easy for customers to pay you.
a.I know many don't like to accept credit cards, but occasionally using a credit card will get you paid much faster or even up front.
You might even be allowed to have the card on file so you can take monthly payments or whatever you agreed with your client.
b. You can also have clients pay you online not only by credit card but by ACH, which has cheaper transaction fees- it's per transaction not a percent of transaction.
There may be a monthly fee, so you'll have to check it out.
You might like the Intuit Payment Network.
Personally, I use Bill and Pay because it had some pretty good features I couldn't accomplish through Intuit.
6. Accept payments up ahead or at time of service, then you don't have collection worries.
I advocate saving prepayments aside and using it for the client job instead of other bills.
If you discover you utilising it for other payments, that should be a caution - you need to take a deeper look at your financials.
7. Run the Cash Flow Forecast in QuickBooks (Reports> Company & Financial).
This presupposes customers pay you on time and you pay your vendors on time, but it can be quite helpful.
8. Monitor your payables closely - the A/P Aging summary and Unpaid Bills are two helpful reports.
Of course this requires you enter your bills in QuickBooks and don't just simply utilise the Write Check tool when it's time to pay them!
Here's a more in-depth look at how you do that.
9. Monitor job costs - If you have work or project costs, then you need to monitor the spending for that task and the invoicing for that project.
For this reason, I choose QuickBooks Premier because of the added reporting.
If you want to know more, you can look at this video or call our office.
If you are in Pro and wish to move up, we'll be pleased to get Premier for you and help you with the upgrade.
10. Monitor your debts.
Loan and credit card payments may not show up in your A/P Aging reports therefore you need to be sure you consider these.
The Statement of Cash Flow Services helps as do the Current and Debt ratios.
I hope your firm is doing well financially.
Regardless of where you stand, these 10 measures should aid you in the area of cash flow.
If you need assistance with any of these processes, email us and we'll be pleased to help.
Muir & Associates helps businesses use their Intuit products more efficiently and more effectively so businesses can focus on their company and make more informed decisions.
We provide sales and support services.
Monica Mitchell Muir has been helping businesses with their QuickBooks products since 1996.