by Vince Liuzzi
Executive Vice President and Chief Banking Officer
We live in a health-conscious world. If we’re not stepping on the scale or analyzing labels on groceries, we’re counting steps and calories on pedometers in order to live longer and healthier lives.
However, what many of us, at least those who own businesses, neglect, is regular assessment of the health of our businesses to maximize their longevity, too. It’s not difficult. and you don’t need a scale, a pedometer, or even a doctor. You simply need to look at your cash flow.
Cash flow is one of the most important predictors of business health. If you have positive cash flow (more money coming in to your business than going out), your business is likely in good shape.
Here are some important exercises to help improve the health of your cash flow – and ultimately, your business:
- Know where you stand. At any point in time, you should know your cash position. If you’re spending more money than you’re bringing in, it’s time to take a long hard look at the future of your business. Online and Mobile Banking services are quick, convenient ways to help manage cash.
- Cut expenses. A key part of understanding your cash flow is knowing and understanding your expenses. Be sure to track monthly expenditures and regularly think about ways to reduce them.
- Expedite collections. One of the biggest culprits behind cash flow problems is managing receivables. Do customers pay your invoices in a timely manner? Many banks offer cash management services that help you collect and manage customer payments more efficiently.
- Accept credit or debit card payments. Another way to improve collections is to offer customers convenient ways to pay, including debit and credit card payments. With these merchant services, funds are deposited into your account quickly, maximizing cash flow.
- Deposit funds more efficiently. If your customers pay by check, utilize Mobile Deposit or Remote Deposit, which allow you to deposit checks more conveniently, eliminating trips to the bank and providing faster access to your funds.
- Maximize idle funds. Don’t leave extra cash sitting in an account where it doesn’t earn interest. Sweep accounts allow you invest those funds and put idle balances to work for you.
- Pay efficiently. Use electronic services to pay suppliers and other vendors more efficiently. By scheduling automatic payments on the dates they’re due, you’ll get full use of the funds for the maximum amount of time.
At DNB First, our knowledgeable business specialists are available to review your cash flow position, and suggest ways to strengthen the health of your business. And the best part is, they won’t make you step on the scale!