Improving Your Business Cash Flow in Manhattan, NY: How an Accountant Can Help

For any business, low or negative income is a big risk, no matter the profit it makes. A business caught without an income may not continue its operations. This is particularly true if your business only has modest savings.  In addition, cash is crucial for credit. With stronger cash flows, you get better credit ratings. The creditworthiness of your business can significantly affect its survivability and how investors see it.

Sadly, not all business owners have the time or skills to effectively handle their cash flow. In such cases, a CPA in Manhattan, NY can help you keep your money rolling in. Read on to learn how an accountant can help you manage your cash flow:

They Create Budgets and Forecasts

An accountant can help you understand the financial data of your business, giving you the perspective to make accurate forecasts and budgets based on it. But only an accountant who is equipped for this type of work can do this. If you want the best results, engage with an accountant who handles such activities for small businesses.

Create Capital Expense Analyses

An accountant can help you make smart decisions about huge purchases. They can examine the acquisition and financial figures, so you can determine if this is a great decision for your cash flow. Also, they can recommend whether you should switch to a new piece of equipment or hang on to the current one.

Manage Invoices

Paying invoices on time allows for a healthier cash flow. This does not have to be a problem for retail businesses where cash is exchanged during transactions right away. However, any business that depends on giving credit must actively handle its receivables to ensure its cash flow is healthy. An accountant can make sure invoices are sent on time and that follow-ups are made on receivables. They can also establish optimizations to reduce losses from invoicing errors. 

Manage Credit

Overdue payments are frustrating to deal with. An accountant can establish clear credit policies and keep track of customer payment behavior. Their guidance helps you reduce late payments and ensure cash flow is high. 

Manage Inventory

Any unsold stock in your warehouse shows a serious cash flow issue. An accountant can analyze inventory turnover rates and make sure your business is not tying up excessive cash in stock. With proper optimization, you make sure you only have enough to meet demand and not get bogged down.