Do you want to grow your business and increase your revenue? Did you know that tax planning or tax preparation services, when done correctly, can help you do both of these things and more?
There are few things more critical to your business than cash flow. With a healthy cash flow, you can pay your debts on time, sustain your operations and expand your business. Without it, you’re only a few missteps away from financial ruin.
What Does Managing Cash Flow Mean?
Cash flow management is a set of practices and strategies to help you track, analyze and improve the financials of your business. The goal of cash flow management is to get you in the “green,” also known as positive cash flow, where you have more money coming in than going out. The correct tax preparation services can help you to increase your cash flow.
Here are 6 of our favorite strategies for a healthy cash flow:
1) Cut Your Income Taxes:
Tax planning allows you to improve your cash flow right away by eliminating or decreasing the withholding or estimated quarterly payments.
2) Break-Even:
Before working towards a positive cash flow, you need to know how much you need to earn to break even. If you go over the break-even point, you’re doing something right. If you fall short of it (consistently), then there’s an issue that needs addressing.
3) Emergency Cash Reserve:
A good rule of thumb is to have enough to cover at least three to six months’ worth of expenses. Proper tax preparation services can help you save enough money to have a cash reserve.
4) Early Payments:
You are not a bank stop financing your clients. Encourage your customers to pay early—which will benefit you financially—by offering special deals or discounts if they pay ahead of time.
5) Put Cash Flow over Profit:
Most people think that the secret to entrepreneurial success is profit, profit, profit. But actually, it’s all about how you manage your cash flow. Always check your earnings against your break event point.
6) Clear out Your Inventory:
Clearing out your inventory can help kick-start healthy cash flow. Try to employ discount sales and planned promotions to move products as fast as possible.
Let us take care of your tax planning and tax preparation services so you can concentrate on what you do best, running your business!! Let’s discuss more in a strategy session. Book Your Free Assessment Here.