President Donald Trump has signed into law the most extensive overhaul of the US tax code in nearly 30 years and it’s arguably the most significant legislation of Trump’s presidency. But for small and medium businesses (SMBs), across various industry verticals such as Automotive, Healthcare, Manufacturing, Not for Profit, Restaurant, Technology and Retail, the pertinent question is, how can they leverage this tax reform to their advantage?
Cash flow is the lifeblood of an organization as cash flowing regularly into a company is necessary to pay salaries, buy inventory and literally keep the lights on and the doors open. Companies are forced to slow their growth when they lack the cash inflows that are required to support the cost outflows. Owners who cannot efficiently manage their business cash flow are almost certain to fail and those who are able to manage can improve nearly every aspect of their business.
Below are five tips for managing the cash flow of your business:
August, 2017 – The United States has the most advanced technology services industry in the world. According to Financial Times, Silicon Valley groups occupy the top five spots among the world’s most valuable companies. The industry accounts for 7.1% of U.S. GDP and 11.6% of U.S. private sector employment. There are approximately 388,000 software and IT services companies in the United States, of which more than 99% are small, medium and micro sized firms. These firms operate in a mature, stable market which has a reputation for producing reliable and effective solutions that accelerate rapidly to the marketplace.
Accounts receivable is perhaps the most critical process for SMBs to conquer as its improper management could lead to unhealthy cash flows. There are several challenges that SMBs encounter during their accounts receivable process cycle such as: difficulty in matching payments to invoices, receiving late payments, rising Days Sales Outstanding (DSO), invoice delivery problems, customer resistance to electronic invoice adoption, customer attempts to extend terms, very limited payment methods and inaccurate and outdated information.
These challenges can be mitigated if SMBs take control of their accounts receivable process. However, they must understand and employ the right steps in the right way. Outlined below are some suggested steps to take:
Countless unexpected issues can pop up for SMB owners that create seemingly overwhelming challenges – many of them financial in origin. The most common issues faced by SMBs are: maintaining a positive cash flow, not getting accurate reconciliation reports on a monthly basis, and securing funding for the company’s growth. Fortunately, SMBs can easily manage these issues through with a solid financial process and reporting.
In this blog, we’ll talk about the 3 biggest financial issues that SMBs face, as well as tips to help them manage these issues.