Small Businesses and Money: Everyday Challenges

 💲 How do businesses make more money?

💹 By increasing cashflow!
💲 "Well, thanks Mr. Genius Accounting guy! I'll go do that right now!"
😁 Taking a step back, how does one increase cashflow?
🤔 Well, sometimes it's just doing the "little things" well, like increasing inventory turnover (without losing your shirt!), lowering your receivables, taking advantage of vendor discounts, and implementing modest general price increases.

👍 Besides these starting points, there are other focus areas we can look at during a free thirty-minute consultation. To elaborate a bit, a consultation might look at:

• The last three to five years of tax returns (1065 if a partnership, Schedule C from your 1040 if a sole proprietor, or 1120-S if a S-Corporation). 
• Plenty of nuggets we can draw from each of these, such as:
• Were there tax deductions or credits missed? Are they worth an amendment or just something to make sure we capture in the current year going forward?
• A/R Aging
• Do you have a high concentration of receivables (accounts) over 90 days? Do these customers need to go to collection and then be placed on COD terms?
• AP Aging
• Is the business missing out on 2/10 or 1/10 Net 30 discounts because it's occupied paying down older debts over 60 or 90 days? 
• These discounts add up quickly to lost money. Quick math says 36% in lost discounts on purchases each year for a given vendor with 1/10 Net 30 terms, assuming 3 purchases each month.
• Inventory Turnover
• Is there a noticeable concentration of old inventory with a high carrying cost? Carrying costs could be a combination of financing needed to purchase the inventory, warehouse/retail space rent, manpower + software + equipment needed to manage inventory, and lost opportunity costs in not being able to purchase fresh inventory because your money is tied up in the old.

☎ Call 509-953-4298 to schedule your consultation and find out more! You may also email us at inwaccounting@protonmail.com.