Three Simple Ways to Manage Your Company’s Cash Flow

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Whether you’re launching a new business or you’re a seasoned entrepreneur, managing cash flow can be a challenge. In fact, cash flow problems are one of the key reasons small businesses fail.

Having a clear system in place can help you take the guesswork out of the process and streamline the way you handle finances. Below, we break down three simple ways to improve your company’s cash flow and boost your chances of success. 

Analyze Your Cash Flow

First things first. Before you can optimize the way you manage cash flow, you need to have a clear understanding of what cash flow is. A simple definition is that cash flow is the amount of money moving into and out of your business each month. This includes money earned through sales as well as money paid out to cover operating costs. 

The best way to get a handle on your cash flow is by analyzing your inflows and outflows. Start by taking a close look at each of your revenue sources. These may include:

  • Direct sales
  • Earned interest
  • Royalties 
  • Licensing agreements

To arrive at your net income, you’ll need to subtract your expenses from your monthly revenue. Be sure to take into account all of your recurring costs including rent, insurance, loans, payroll expenses, and strategic investments. These types of investments are a necessary part of growing your business and should be closely monitored.

Since cash flow can vary from month to month, especially for seasonal businesses, it’s important to track all of your expenses carefully so that you can have funds available to cover them and prevent any issues before they crop up.

Streamline Your Payments

Once you have a clear understanding of your revenue and expenses, it’s time to optimize the way you process payments. An all-in-one solution such as Square is a great option. Designed to help you make the most of your money, Square enables you to take payments easily and securely either online or at the point of sale. You also won’t have to worry about hidden fees or complicated pricing. 

With a built-in invoicing option, Square also eliminates cumbersome invoicing processes and allows you to view all of your incoming payments in one place. You’ll be able to create and track invoices seamlessly, which could help you get paid more quickly. 

Manage Your Finances

Streamlining the way you process payments is an important part of cash flow—but it’s only one piece of the puzzle. To fully optimize your cash management, we suggest taking a close look at how you handle your finances. Ensuring that your business and personal accounts are kept separate is an important step and it can help you avoid unpleasant surprises, especially when it comes to taxes (an often overlooked expense). 

Here too, Square’s solutions can play a key role. Featuring a full range of cash flow solutions— including payments, checking, savings, loans and payroll—Square lets you manage your money quickly and easily. With seamless integration, Square Checking also allows you to access your money as soon as sales are made, without monthly fees or minimum deposits.

Square also helps you grow your savings by automatically deducting a certain percentage of each sale and transferring it to a savings account where it can earn interest at a rate up to 8x the national average.

If you’re interested in taking your business to the next level, Square small business loans enable you to borrow anywhere from $300 to $250,000. Your eligibility is determined by the amount of sales your process through Square, along with other factors. If you qualify for a loan, you’ll be able to borrow as much as you need up until your maximum loan offer amount, and you can repay the loan automatically with a percentage of your daily sales. 

No matter how long you’ve been in business, managing cash flow can sometimes feel challenging and overwhelming. If you’re looking for a way to streamline your company’s finances, implementing new strategies can be a big step forward. By taking a close look at your cash flow and adopting Square’s simple solutions, you can position your business for long-term success.

This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional.

Square, Inc. is a financial services company, not a bank. All loans are issued by Square Financial Services, Inc., a Utah-chartered Industrial Bank, Member FDIC located in Salt Lake City, Utah. A minimum payment of one 18th of the initial loan balance is required every 60 days and full loan repayment is required within 18 months. Actual fee depends upon payment card processing history, loan amount, and other eligibility factors. Loan eligibility is not guaranteed. All loans are subject to credit approval.

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  1. Square Checking is provided by Sutton Bank, Member FDIC. Funds generated through Square’s payment processing services are generally available in the Square Checking account balance immediately after a payment is processed. Fund availability times may vary due to technical issues. 

  2. Savings accounts are provided by Square Financial Services, Inc. Member FDIC. Annual percentage yield (APY) of 0.50% or more will apply until 12/31/2021, after which the APY in-effect at that time will apply and will be subject to change. No minimum deposit is required to open an account, and no minimum balance is required to obtain any advertised APY. Accounts will not be charged monthly fees. Accounts are FDIC-insured up to $250,000. The savings account rate is more than 8x the national average of 0.06% APY, based on the national average of savings accounts rates published in the FDIC Weekly National Rates and Rate Caps accurate as of 6/21/2021.

  3. Square, Inc. is a financial services company, not a bank. Square Banking services are provided by Square Financial Services, Inc. or Sutton Bank; Members FDIC.