1. Create a Cashflow Statement
Forecasting your cashflow for the coming quarter or the coming year is one of the most important steps you can take to ensure that you don’t end up overspending and driving your business into debt. This is especially true for small businesses that experience seasonal swings in sales and revenue, but every small-business owner will benefit from the creation of a precise cashflow forecast. It is the first line of defense against any financial problems your business might face and it provides a roadmap to fiscal health and wellbeing. Regular cashflow reviews can help you spot potential problems that may jeopardize your solvency, such as late-paying customers or erratic vendors. Don’t wait until you are behind the eight ball to take a good long look at your cashflow; start sketching out a projection for next quarter now.
2. Reevaluate Your Recordkeeping Systems
If there’s one thing you can do to improve your overall financial health without so much as breaking a sweat, it’s revamping the way you keep records. Tracking every single expense, as well as all of the cash that flows into your business, is essential. Not only will better records help you make more accurate predictions about your company’s financial future, but they will also keep the IRS off your back! If you are still using paper records, then it’s time to think about switching to a cloud-based system that will separate your purchases into easy-to-identify categories. Don’t hesitate to research a few different options—find a system that feels comprehensive and intuitive.
3. Use Credit Monitoring Tools
Every time you request credit from a lender, the very first thing they will do is obtain a copy of your company’s credit scores and records. That is why it’s essential for you to know what the credit reporting agencies know. Dun & Bradstreet Credibility Corp. offers a variety of powerful tools to help small business owners monitor and understand the information contained in their credit reports. CreditBuilder™ gives you access to the same database used by your creditors, but perhaps the most important function of the CreditBuilder™ program is that it automatically sends you an electronic alert every time new information is added to your report, or whenever a copy of your credit report is requested by another company. Ultimately, improving business credit is all about understanding business credit. If you want to see your score increase, then using a tool such as CreditBuilder™ to keep tabs on your report is a necessary first step.
[Photo Credit: BFA]