It’s hard to believe that another year is winding down already.
For small business owners, the end of the year serves as perhaps the best time to reflect on the accomplishments their organizations made over the previous 12 months. It’s also a time to reward employees for their hard work and dedication by giving out end-of-the-year bonuses and hosting holiday parties.
Which for many companies is often easier said than done. Businesses that haven’t paid much attention to their cash flow over the course of the year—and there are a lot of them—may very well find themselves stuck in precarious financial situations when they look at their balance sheets as the year draws to a close.
Even if your business has been crushing it all year long, if you don’t have access to liquid cash, it’ll be considerably more difficult to show your staff how much you appreciate their efforts at the end of the year.
The good news is that if you find yourself in that predicament, there’s enough time to get your cash flow house in order before the holiday season even if the numbers you’re looking at might convince you otherwise.
Here are three ways your business can improve its cash flow so you can be sure you have enough money on hand to reward your employees as the year winds down:
- Reassess your invoicing system. One of the main reasons businesses encounter cash flow problems is because their customers aren’t quick when it comes to settling their invoices. If you’re having a hard time collecting the revenues you’re owed, you may want to consider invoicing your clients more regularly (e.g., every other week instead of once a month). You also might want to offer discounts to encourage your customers to pay early.
- Use Fundbox. Don’t want to take a new approach to invoicing? Not a problem. You can use cash flow optimization tool like Fundbox to advance payments on outstanding bills. For a small fee, Fundbox gives you immediate access to the cash your business needs to grow (or in this case, show your employees how much you value them). You then have 12 weeks to repay the advance and fee.
- Shop for new vendors. When’s the last time you did your homework to see whether you were getting the best deal on your supplies, utilities, and health care costs? In today’s competitive business world, there’s no shortage of vendors trying to undercut their competitors. If you’ve been relying on the same insurance companies, ISPs and suppliers for the last decade, for example, it might be time to see whether some newcomers can offer better prices.
Cash flow is a problem for many businesses; if it’s a problem for yours, rest assured you’re not alone. But by taking a proactive stance, you’re able to overcome your business’ cash flow gaps and gain access to the funds you need to reward your staff during the holiday season. That way, you’ll give them the encouragement they need to be committed to continue knocking it out of the park in 2016.