There are many ways to improve cash flow, so let’s take a look at some of the strategies that have been working for our clients.
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Review your cash flow statement (cash summary) regularly
If you want your cash flow to improve, you’ll need to keep a regular eye on how your cash is moving. Fortunately, accounting software make it very easy to generate cash flow statements and reports.
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Prepare regular cash flow forecasts using a cash flow forecast
The cash flow forecast is one of the most important financial documents for your non profit organization. Unfortunately, it’s also one of the reports business owners tend to ignore. A cash flow forecast is an estimate of the amount of money you expect to flow in and out of your business every week, month or even a year. It’s particularly useful when you foresee a cash shortage coming up, so you can apply a corrective action before it’s too late.
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Reduce business operating expenses
Do you really need to be paying for the most expensive customer relationship (CRM) software, or will a simple spreadsheet do the trick What about all those online courses and training that you’ve paid for that you’ve never even looked at? It’s easy to get caught up in the latest technology and shiny objects. But failure to stay on top of your monthly spending can spell doom for your business.
Don’t assume that you can just write it all off as a tax deduction. What if your business goes under before you get a chance to claim those expenses back on tax? Ouch.
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Attract New Clients as part of your Non Profit Business Plan
Whilst writing a 60-page business plan probably isn’t the best use of your time, having some kind of strategic plan and understanding your business model can be very useful for identifying opportunities to improve your cash position.
Some questions to get you thinking:
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Who are your best and most profitable clients? What about the least profitable ones?
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How can you add complementary products or services to increase Customer Lifetime Value (LTV)? How can you remove or tweak underperforming ones?
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What’s your marketing, lead generation, and sales strategy? What’s been working for you in the last 90 days? What hasn’t?
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Are there any sales and marketing tasks that you could outsource?
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Are there other funding avenues that you haven’t considered?
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How can you wow your current clients better, so that they stick around longer and/or refer more clients to you?
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Are you effectively leveraging strategic partnerships as a channel for attracting new business?
Have questions? Not sure where to start? We can help!
