With spring in the air, it's time for small business owners to review their balance sheets and find opportunities to improve the life blood of their business: cash flow.
"Successful entrepreneurs know that while their business may be profitable, cash is still king when it comes to growing their enterprise," said John Roberts, Vice President for Small Business at Scotiabank. "Putting a solid cash flow plan in place gives entrepreneurs control of what flows in and out."
Scotiabank offers five tips for making the most of your cash flow:
Understand Your Business Situation: Cash flow is an essential aspect of your business and its future success. You need a full picture of the factors that will impact your cash flow - including sales volume, payment terms, and business expenses. Scotiabank offers a Scotia Cash Flow for business Tool that can help you assess your current cash flow and create projections.
Be Prepared to Adapt: Your cash flow projection is something that will constantly evolve. Keep your accounting records up to date and create cash flow reports frequently to see what the impact of the changes could be. Whether you are expecting your cash flow to grow or shrink, knowing any change in projected cash flow gives you the time to create a financial strategy.
Identify Your Cash Flow Killers: Every business is going to have expenses, but there are methods to keep them under control. Regularly review your expenses and suppliers to look for ways to lower costs. For example, negotiating with your suppliers for early payment discounts or extended penalty-free payment terms. Using a credit card with an extended grace period can be an effective way to slow the payment process.
Take Advantage of Cash Flow Boosters: Consider loyalty credit cards that reward you for your everyday business transactions like purchasing office supplies, entertaining clients at restaurants and filling up at the gas station. Even small savings can add up to a large cash reward at the end of the year that you can reinvest into your company.
Avoid Unnecessary Expenses: Take advantage of credit cards that include a comprehensive suite of insurance benefits including travel insurance, rental car collision, and purchase security and extended warranty for you and your small business so you don't have to make an extra payment every month.
Scotiabank also announced a new credit card for Canadian businesses. The Scotia Momentum for business VISA card is designed for small business owners, offering up to 3% cash back on eligible business purchases and recurring bills, 1% cash back on all other eligible business purchases, and an extended interest-free grace period of at least 25 days on purchases.
"A credit card that gives you cash back rewards for your business purchases, and an additional 4-day grace period, provides strong new options that can help bolster cash reserves and ensure your business can prosper," Roberts added.
"With the growing popularity of rewards cards, we saw an opportunity to create a credit card for the unique needs of Canada's small business owners," said Jennifer Douglas, Vice President of Credit Cards at Scotiabank. "In addition to getting cash back on their everyday business purchases, small business owners now have at least 4 more days to free up that all-important cash flow with the extended grace period of 25 days available with the Scotia Momentum for business VISA card."