Business is about cash, and if you do not handle that correctly, you cannot run the business correctly. Businesses focus too much on revenue and do not take cash management very seriously. They frequently engage in faulty cash management, which affects not only their revenue but also their entire business. Karla Dennis, the CEO of Karla Dennis and Associates, Inc., says:
“The success of a business depends to a great extent on how it manages cash.”
The important thing to remember is that business is not just about earning cash; it is also about managing cash. Here we will discuss some important cash management tips that are recommended by Karla Dennis herself:
Pay Your Bills on Time
If you want your business to run smoothly, Karla says, you should decide an ideal time for paying bills. Make sure that your payment routine is fit for your business and its needs. Ideally, Karla recommends paying bills every two weeks. She recommends picking one day of the week, preferably the weekend, for looking and bills that will be due before your next bill pay cycle and making sure you pay them.
According to Karla, the most important thing businesses should keep in mind while issuing invoices is making sure to include payment terms and a payment link so that it is easier for customers to pay.
Create a Cash-Flow Forecast
“When a business starts running smoothly, business owners forget that businesses are inherently unpredictable, and that’s when they get in trouble.”
Just because your business is making you money now does not mean you should not be worried about its future. Karla believes that one of the keys to running a business effectively is staying proactive and understanding your cash-flow forecast. You need to stay mindful of how much cash is coming and how much additional money may be needed to fully operate your business.
Keep A Line of Credit
As we already mentioned, businesses can be unpredictable. A business line of credit can be a valuable tool if you need money for some short-term necessities urgently or in emergency situations.
Invest in Money Market
As a business, you will have some extra income on and off. Your business’ long-term success depends on how you handle that extra income. As per Karla’s expert opinion, investing it in a money market account is a safe and good option in this regard. Karla recommends business owners invest 5 to 10 percent of their gross income into a money market account. According to her, this can help business owners build cash reserves for their businesses.
Segregate Cash Handling and Cash Recording Duties
According to Karla, the most important thing for a business, in terms of finances, is the integrity of financial transactions. Some businesses let the same employees deal with both cash handling and cash recording. This, Karla says, can compromise the financial integrity of business transactions. That is why she strictly recommends segregating cash handling and cash recording duties.
How Can Karla Dennis and Associates, Inc. Help You?
If you need any help with cash management, Karla Dennis and Associates, Inc. is there for you. Karla Dennis and Associates Inc. remains acts as the eyes of business owners and makes sure that what they see happening in a business is what they anticipated. Karla’s firm will keep you properly informed so that you do not run into cash flow issues.