![]() You can build out as many scenarios as you want, but we recommend starting with three different scenarios: best case, likely case, and worse case.īy assessing and tracking for these scenarios, you can gain a better understanding of how money is flowing in and out of your business. If you work with a bookkeeper, they can work with you and help you gain a clear understanding of where your retail business stands. ![]() If forecasting seems daunting, we recommend seeking the advice of an accountant or bookkeeper or using this handy forecasting template. Step 2: Forecast scenarios for your businessįorecasting scenarios will give you a view of your cash flow and whether you’ll have a shortage or surplus. If you’re a Shopify POS customer, you can use Stocky by Shopify to review previous sales trends and gain better accuracy in financial reporting. Use inventory management tools to learn what’s selling and what’s not and receive real-time stock data. Poor inventory control can lead to fewer sales, unhappy customers, and obsolete stock. You can get paid faster by offering online invoice payment options or processing payments remotely through payment gateways like Stripe, GoCardless, PayPal, Venmo and Square. Opt for sending invoices electronically and shortening your cash conversion cycle. Delivering invoices via mail will slow down billing and collection. This could include asking for an upfront payment before work has started or is completed, or offering incentives, such as discounts for earlier payment. Proactively reaching out and collecting bills could be the difference between your business surviving and failing. If your vendors are struggling, ask them to be open and transparent, and present a payment plan. This is the time to proactively get in touch with vendors to understand why they might not be paying. And, with all information in one place in the single ledger, you can access real-time financial information through powerful and flexible reporting tools. Backdating books with A2X can be done in minutes, and will ensure your finances are accurate and show your current financial position. You can automate your finances and accounting with solutions like Xero and A2X for Shopify. The good news is, updating your books doesn’t have to be an arduous task. Your accounting records are not only a reflection of your financial health, they’re also tools you can leverage to make informed decisions about your business. Here are some best practices to getting your books organized and optimizing your cash flow: The next step will be figuring out how to inject cash flow into your business (even if you’re not conducting business as usual). ![]() The first step is understanding your current cash position and how much “buffer” you currently have. Accounts receivable, accounts payable, and inventory are all components of working capital that retailers can optimize to access cash trapped on their balance sheets.īelow, we’ve outlined the three basic steps you can take to get your books in order and optimize your cash flow. Given the importance of cash flow in times of crisis, retailers should immediately develop a plan for cash management as part of their business continuity plans. When economic times are uncertain or you're in the throes of notoriously slow retail months, a low cash reserve leaves businesses susceptible to bankruptcy. Unfortunately, research from JP Morgan reveals that half of all small businesses hold a cash buffer of less than one month and 25 percent of small businesses hold fewer than 13 cash buffer days in reserve. And a solid cash flow management strategy is key to weathering a crisis like COVID-19. Cash flow is the lifeblood of any business.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |