Your business is growing, and things are booming. New customers are being brought on at an ever-faster rate, and you feel like you’re in a great spot. Then your bookkeeper gives you the latest financial report.
The numbers don’t lie — you’re not bringing in enough cash to handle your recent growth. Your expenses are rising while your operating funds are shrinking. If sales continue to rise, which doesn’t seem like a problem, how will your company handle the increased growth? What if your largest customer decides to delay payments an extra 30 or 40 days? Would your company be able to continue down the path you’ve worked so hard to achieve?
Managing a growing business can be difficult, and the toughest problem is being sure your company can successfully sustain high growth. Here are some ways to stay on top of this common issue.
- Set up regular briefings with your bookkeeper and CPA. This step is crucial: The earlier you know about an issue, such as decreasing operating funds, the easier it will be for you to solve the problem.
- Control your expenses. Be sure they’re within reasonable levels for your growth. Going through the books a few times to be sure money isn’t being spent unnecessarily can help set your mind at ease.
- Manage invoicing. It would be very nice to know exactly when your customers will pay you. Staying on top of timely invoicing and customer satisfaction helps to ensure payments are received within invoice terms.
- Engage with a fractional CFO. Even if you’re not ready to hire a full-time CFO, a part-time one can help you get a handle on your projected revenue and expenses.
By using these tips you can help your business manage growth and cash flow successfully.