When business owners start to feel the choking effect of a slow cash flow, they often blame their customers. “How come we are not getting paid on time?” But, it is important to remember that cash flow is affected by a variety of elements. For example: operating expenses and overhead can have a significant impact. Here are five often-missed ways to cut costs and improve cash flow:
- Review your rent or mortgage. Can you negotiate a lower rent with your landlord or refinance your mortgage? Also, look into whether you may not need as much office space if you have begun to allow many employees to telecommute.
- Implement energy efficiency improvements. You would be surprised by how much of a difference little changes can make to lower your utility bills. For example, draw the shades in the summer and adjust the thermostat a few degrees. Or look into whether it is time to make an upfront investment in better windows or HVAC equipment.
- Take a close look at travel and entertainment expenses. Can you pare these down by conducting more meetings via teleconferencing or using a web-based application? Can you cut back on expensive meals and, if applicable, sports and concert tickets for clients? Clearly, you do not want to diminish relationships with clients and vendors by cutting back too much. But, there may be ways to save.
- Slow down shipping expenses. Employees often send packages overnight when two or three day shipping would suffice. Establish or re-establish clear policies. In addition, you might be able to find some lower cost shipping arrangements by comparing providers.
- Give us a call. Our team of business advisors would be happy to take a comprehensive look at your company’s expenses and assess how they are affecting your cash flow. Most likely, we can make some strong money-saving recommendations.