Positive cash flow is a vital part of any small business operation. It's key to growing your venture and maintaining profitability, which 49 percent of small business owners say is the biggest challenge they face.
A business checking account and a business savings account can help you build a solid foundation for tracking the money that's flowing in and out of your business. Separating business from personal finances also can simplify your business record keeping and tax filing.
But how do you know when it's time to branch out and incorporate more than just checking or savings accounts? If you're experiencing any of the following three scenarios, it may be a signal to look into more advanced cash flow management solutions.
1. You've Increased the Size of Your Team
As your business operations expand, you may need help meeting increasing customer demand for your products and/or services. Adding new members to your team may be a logical next step, but this can add a wrinkle to your cash flow management.
The bigger the team, the more time-consuming taking care of payroll may become. When you're running a business that's growing at a steady clip, time becomes one of your most precious assets. Streamlining your payroll management as much as possible can free you up to focus on core growth activities that are going to push your business to the next level.
In that situation, turning to your bank for payroll solutions makes sense. These solutions may include payroll processing, direct deposit services, and payroll tax management, all of which can make managing this aspect of your cash flow easier.
2. Credit Card Transaction Volume Is on the Rise
Accepting credit cards as a form of payment, alongside cash, checks, debit cards, or prepaid cards, could make your products and services more accessible to customers. In 2017, 21 percent of purchases were made using a credit card, according to Federal Reserve data. And credit cards were more often used to make larger purchases, which could translate into higher sales for your business.
“Credit card purchases need to be convenient for the people who buy from you; otherwise, they may not go from first-time customers to repeat buyers.”
Your credit card processing systems should be efficient and streamlined, while allowing for flexibility in the types of cards you accept.
These are benefits your bank's merchant credit card services package may offer. Merchant services can allow you to accept a greater variety of payments, including mobile wallet payments and EMV chip cards. You also can find solutions that help make tracking and managing accounts receivable easier, which can keep cash flowing smoothly in your business.
3. You're Concerned About Fraud
Payments fraud is a real threat to the financial health of small businesses. Payments fraud hit a record high in 2017, with 78 percent of organizations reporting falling victim to some form of fraud.
Fraud can cost your business in more ways than one if it causes you to lose customers or if fraudulent chargebacks eat into your cash flow. Fortunately, your bank may offer products or services that are designed to help you minimize the potential for fraud.
For example, the bank may offer online tools to help you easily track and reconcile check transactions to detect potentially fraudulent items. A similar tool may be available to help monitor ACH transactions to help ensure that no debit transactions are being paid from your business bank account without authorization. The more fraud and security controls you can put in place to manage incoming and outgoing payments, the better.
Give Your Cash Flow a Closer Look
These are some of the most obvious indicators that your cash flow management strategy may need an overhaul, but there are other signs you might miss. Sitting down with your business banker to review your cash flow systems can help you determine whether there are any gaps that business banking products and services could help to fill.
