8 cash flow hacks your small business can use right now

Hack #1: Track monthly expenses

Oftentimes, expenses seem reasonable when you’re operating on a day-to-day basis. That said, you might be surprised at how much you’re spending when you zoom out and see the big picture.

That’s why it’s best to input every single expense into a spreadsheet so you can get a high-level overview of all the money going out. This will allow you to analyze how much you’re spending on specific items, and identify places where it might be wise to cut back. Be sure to ask yourself if certain expenses are necessary and if cheaper alternatives exist.

Hack #2: Refocus product orders

Understanding your sales pattern is an essential part of managing your cash flow. Once you have an idea of what’s in demand, you can prioritize ordering products that fly off the shelves. At the same time, it’s wise to reduce ordering products that are less popular.

Hack #3: Get creative

You don’t have to do everything alone–your customers can also help you increase your cash flow! Sell gift cards so you can make some extra cash before your products come off the shelves. You can also offer early payment discounts to customers who pay ahead of time. Discounts often lead to increased sales which ultimately bring more cash through the door. You can even consider offering Buy Now, Pay Later services which enable customers to purchase goods here and now and pay for them in installments in the future.

Hack #4: Pay bills on time

You may feel pressed to pay your bills before they’re due so you can cross one more thing off your to-do list. However, it’s better for your cash flow to keep more cash on hand now and pay on the due date. A good rule of thumb? Pay as late as you can without facing penalties.

Accounts payable (AP) tools like Melio are a great place to start. They allow you to schedule your payment in advance so it goes out on time (and not a minute too soon) without the risk of forgetting about it by the time the due date rolls around.

Hack #5: Create an emergency fund

It’s always a good idea to set aside a bit of money each month to serve as a cushion. It will act as an emergency fund in the event you suddenly become really strapped for cash. Nobody can predict when exactly this might happen, which is why it’s a smart precaution to take.

You can start by saving up about three months’ worth of money. Work out the numbers and then you can set aside a portion of that each month. Your bank account will thank you later.

Hack #6: Form a buying cooperative

Good things come to those who band together. So, consider finding other like-minded business owners with similar product needs to increase your purchasing power. You can pool your cash together to negotiate with suppliers who give discounts to large customers who buy in bulk. You can also reduce time spent contracting and benefit from improved terms and conditions.

Hack #7: Create a cash flow projection

Determining when you’ll receive and spend money is an important part of the budgeting process. Start by reviewing last year’s numbers as a baseline for projecting your cash flow. Then, adjust for anticipated changes like new pricing, possible new sources of funding, and the state of the economy.

Cash flow projections allow you to stress less about where your money will come from, gives you the ability to plan for times when you might be tight on cash, and improves your ability to pay your staff and suppliers on time.

As your business evolves and your situation changes, update the document accordingly.

Hack #8: Find the right AP software

With online AP platforms like Melio, you can manage all your payments in one place. Centralizing your payments is an essential part of maintaining control and keeping cash flow issues to a minimum.

Plus, Melio lets you pay your business bills with a credit card, even if your vendors don’t accept cards. This lets you defer payments until your next billing cycle and earn card rewards like cashback that you can put toward future expenses. More cash on hand, anyone?