According to our allergies, the spring season is in full swing. And you know what that means: It’s time to do a little spring cleaning.
But spring cleaning isn’t just about tidying up the closets and sweeping up the dust bunnies from their winter hibernation. It’s also a great time to clean up your business finances and review how the year is going so far. Doing this now (and periodically throughout the year) will help your business to be more productive and focused over time.
How to spring clean your business finances
Improve your cash flow
Cash flow (i.e. money going in and out) is the lifeblood of any business. Now that we’re almost halfway through the year, it would benefit you to take a good, hard look at your current cash flow and identify some ways to improve it.
It’s not uncommon for businesses to focus too much on incoming revenue, rather than looking at the full financial picture. Your business might have a disproportionate amount of money going out the door when compared to that which is coming in, without you even realizing it.
Pro Tip: Having a solid grasp on your cash flow begins with having accurate, up-to-date financial records. This will help you to easily identify any problem areas right away. Cloud accounting software can be a lifesaver in this case.
Here are some things to consider when it comes to improving cash flow:
- Is your monthly revenue sufficient? Could you be charging more for your services? (More on that in a minute…)
- What’s your average time to get paid per client? Do you need to reconsider your payment terms?
- Are there any outstanding invoices that need to be followed up on?
- Where can you cut spending? And we’re sorry to rain on your perk parade, but do you really need to offer your employees free laundry service and Thursday afternoon massages? (The ball pit we totally get, though.)
Revisit your pricing structure
Pricing your products or services properly is essential to the long-term success of your business, but it’s also one of the toughest challenges you’ll face.
This is a good time of year to evaluate your pricing and make sure your prices are still keeping pace with the market and what your competitors are charging.
Although the natural tendency is to price your services on the low end in order to be more competitive, you could actually be doing your business a disservice if you’ve set those prices too low. It may undervalue your offerings in the eyes of your clients and will likely take longer for your business to turn a profit.
Need some more help with pricing? Check out our tips for pricing your services here.
Schedule a financial checkup
How’s your business faring so far this year? Is it profitable, or not so much? Are you on track with your business budget and the revenue goals you set at the start of the year? Do any of these questions make you want to curl up on the floor in the fetal position right now?
Get greater transparency into your financials and gain greater peace of mind by scheduling a financial checkup with an expert. Ideally, this should be with an Operational CFO, who can help you understand your numbers and what they mean to the success of your business for the rest of the year (and beyond).
In short, spring cleaning always pays off
You can never go wrong by having a better understanding of your money and how it impacts your business. In the spirit of spring cleaning, dust off your books this spring and dig into your numbers with the help of a financial pro, so you can ensure greater success for the rest of the year and beyond.
How will you spring clean your business finances?