January is the first month in the tax year for many companies. Here are some ways to make the most of the new year to get your company financially organized.
Get your accounting squared away
Fox Business recommends that you hire a CPA to do your accounting for you. You shouldn’t only consider your tax accounting but also have your CPA compile records and monthly financial statements in compliance with GAAP. Many banks will not lend to you unless they see financial reports like that, although this is not necessarily true for alternative lenders, who often work quickly and do not require so much information. Fox also suggests that you keep track of your accounts daily. This means ensuring that you know where everything in your account book is going.
Focus on your cash flow
The ability to predict your cash flow will set you apart from your competitors, according to an article by the National Federation of Independent Business. The easiest way to do this is to make estimations of how much money you plan to spend and what your revenue stream will look like. Look to prior months and years to see what the pattern has been for your business in the past, and think about how future economic trends will impact what you do. Create a ‘best case’ and ‘worst case’ scenario for each cash flow estimation. Figure out how much money you will need to spend each month just to stay in business. Once you’ve begun making estimations, see how they shape up in comparison to the actual numbers. If you are consistently under or overshooting, then factor that into your guesswork.
After making these estimations, you should build yourself a cash cushion to help you in case anything unexpected happens.
If you find yourself needing extra help securing cash flow for your business, consider getting a small business loan from National Funding, which can extend quick financing of up to $250,000.