Did you know the Financial Crimes Enforcement Network (FinCEN) has a YouTube page? Guess everyone’s got one these days, huh?
I bring this up because, on Tuesday, April 30th, they are hosting a little information-giving session on their channel about Beneficial Ownership Income reporting. I’ve mentioned BOI reporting previously as it’s something all corps and LLCs will need to make sure they are complying with by the end of the year.
But if you want some info straight from the source and in more detail, this might be worth catching (it’ll be available on their page after the fact as well).
If you aren’t complying with these BOI regulations and the deadline passes, it’s certainly going to put a drain on your Seminole business’s cash flow — to the tune of $591 per day!
And since I hear “cash flow is our biggest problem” on repeat where I sit, I want to make sure this stays in front of you. Cash flow is already a big enough problem for businesses… no need to add insult to injury by missing government requirements.
This money drain issue is so big, in fact, that it’s also the primary reason that small businesses fail.
There are as many sources of cash flow drain as there are small businesses in America, so I’m not going to try to summarize all of them.
But I can share a few things that don’t get a lot of article coverage but that have come through my office more than once. Let’s get you on the positive side of the cash flow equation today.
Moving Your Seminole Business Toward Positive Cash Flow
“If I had to run a company on three measures, those measures would be customer satisfaction, employee satisfaction, and cash flow.” – Jack Welch, Former General Electric CEO
We’ve all heard the mantra that “cash is king.” Shoot, I’ve quoted it myself many a time. But how do we as business owners keep that cash flowing and live in the land of positive cash flow?
I have a few ideas about that today.
Because I work with so many North Oklahoma City business owners trying to achieve positive cash flow, I began noticing that many different businesses across many different industries often have some of the same opportunities to affect their cash flow status toward the positive.
And that came by identifying some cash-flow killers — the often-overlooked money drainers that can cripple your ability to invest, grow, and weather the unexpected.
So I have five of those cash-flow killers for you to consider how they might be impacting your business…
Billing Automation – Are you performing many billing tasks manually when you could automate them, speeding up collections and payments?
Studies by Aberdeen Group show automated billing can reduce invoice processing time by a whopping 80 percent. Faster billing cycles mean getting paid faster, helping you keep more cash on hand.
And since 9 in every 10 businesses report that their average invoice gets paid late, you’re most likely very motivated to make some gains on that front. I can help you look into that.
Annual vs Monthly Subscriptions – Annual subscriptions are cheaper. But is that annual subscription cost gutting your cash flow when you need it most?
Beware the cash flow trap on this one. That big chunk of money upfront might come at a time when you need it most, like for seasonal inventory spikes or unexpected repairs.
Consider switching to monthly payments if the cost difference is negligible or less important than your need for positive cash flow. Or stagger annual subscriptions throughout the year.
Buying in Bulk – We all know inventory buying gets cheaper the more you buy. But is that bulk deal hindering your ability to pay your other bills or make important investments?
A different idea: consider just-in-time inventory management. This strategy allows you to order inventory closer to when you actually need it, minimizing storage costs and keeping your cash flowing freely.
Customer Churn – If you can predict times when customer churn spikes seasonally, consider a preemptive strike.
By analyzing your customer data, you can launch strategic counter-attacks – targeted discounts before renewal periods, exclusive sales during churn spikes, or well-timed introductions of new products to keep customers engaged.
Not Planning For Growth – That business boom can cause more problems than benefits when you’re not prepared for the increased hiring needs, operations expenses, or inventory expansion.
Put a savings plan in place now, if you don’t already have one. A healthy cash savings account can free you up to invest in growth when the opportunity presents itself.
These are some common opportunities I’ve seen to help move toward positive cash flow. But what about invisible cash flow killers? Are there hidden factors specific to your industry that could be silently draining your resources? I’d be very interested to talk about them and help strategize some potential solutions for you:
calendly.com/rogerelycpa
Cash is king,
Roger Ely