2 things to do with a healthy cash flow
Imagine this: your business is performing wonderfully, you’ve optimized back-office processes, gone paperless, and reduced overhead costs by negotiating vendor agreements. In addition to cutting costs, you have been successful in increasing the number of clients you serve and cash flow is now flowing freely.
If that sounds like your current situation — Congratulations! Hopefully, you’ve already taken the next step of sitting down with your financial advisor and have worked together to map out your next goals and objectives. Maybe you’ve run cash flow forecasts so you know what to expect over the next couple of months — or even years. Perhaps you have liquid cash on hand for emergencies and you’ve saved a lot of capital as well.
Let’s say you’ve taken care of those essential business objectives, and you still have extra cash left over. What do you do next? Here are two things to do when your business cash flow is on the right track:
1. Dig Into Your Human Capital Strategy
Now is a good time to focus more on your staff. Are they happy or are they burning out from working overtime to cover the extra influx of business? Have you created a positive culture and invested in team building? When your cash flow is healthy and strong, it’s a good time to review your job cost reports and see just how much of an impact your new business is having on your employees.
Consider one, or both, of these two scenarios:
- Incentivize Your Current Staff
You know your team has done an amazing job handling the influx of business at your company. However, they may be feeling overworked and burned out from putting in the extra hours to keep everything running smoothly. If your staff has gone above and beyond, consider taking some of your extra cash and offering some well-deserved staff rewards. You can add to your fund for employee bonuses, purchase gift cards, or throw a staff appreciation party. However you do it, let your employees know that their work is greatly appreciated.
- Hire More Staff
If, after analysing your staff, you realise that the current workforce is barely able to handle the current level of demand your business is getting, it may be time to hire more staff. With that extra cash coming in, you know now have room in the budget to hire a few additional hands to help take the burden off your current staff. Additionally, hiring more employees allows you to take on even more work. This could mean a win-win for both the business and your employees.
2. Consider Infrastructure Improvements
As you know, your business needs a lot of equipment to run smoothly. Maybe it’s time to update those computer workstations. Or perhaps the printer has been a little slow lately. Maybe you’ve been wanting to switch from a tape back-up system to a cloud-based one. Now that you have extra cash on hand, making investments to improve your business is a smart move. And by upgrading your ageing, inefficient equipment, you’re allowing your staff to work faster and more efficiently as well. Proactively updating equipment in your office is a good way to avoid derailing operations, should that 15-year-old copier finally decide to break down. A healthy cash flow coming into your business is certainly a sign of success but, it’s also a reminder that you need to take advantage of the opportunity to make those upgrades and make the most of a good situation.
Do you have a solid plan for maintaining consistent cash flow and driving sustainable growth? How much do you plan to grow this year? If you haven’t considered making the transition to outsourcing, it’s time to consider the benefits of outsourcing your bookkeeping and accounting to Solve. It’s a scalable and financial management solution that allows your business to properly manage and continue the trend of success. Reach out to the experts at Solve today to find out how we can help your business succeed.
Please note that this blog is for reference purposes and not issued as tax advice.