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5 Tips for Small Business Owners Regarding Cash Flow

1. Depending on the type of business, you may be able to spread out annual client service more evenly over a 12 month period to provide a more even income flow. Or for example, schedule more clients/customers for their annual service during the month prior to annual property tax and other major bills being due.

2. Evaluate most appropriate payment schedule allowable for business insurance. For example, to help cash flow it may make more sense to make 12 monthly payments each year even though the cost may be slightly higher.

3. If possible, align payroll with business income. For example, if your business typically receives income bi-weekly, change staff payroll to also be bi-weekly. Not only will the alignment help with cash flow, but fewer payroll checks each month can save money on payroll preparation.

4. Evaluate alternative ways to compensate staff, such as more paid time off in place of a pay raise.

5. Maintain an open end “line of credit”. This can provide access to short term funds while you are waiting for customer payments to the business.

© Nancy Butler, May 2011