Subtract Bad Processes for Positive Cash Flow
- Cash flow is one of the most important pieces keeping your business afloat.
- There are certain business office practices putting it at risk.
If numbers, data, and equations excite you, you might work in the business office. Day in and day out, you live in a world of positives and negatives through financial statements, reporting trends, and assets and liabilities, just to name a few.
But the most critical positive and negative you encounter? Cash flow.
You know the power of cash flow; it can make or break business stability. If profitability were food, cash flow would be water. Although profits are important, cash flow is absolutely critical when inventory is scarce and demand is high.
Now more than ever, cash flow is the lifeline of the dealership, making it your top priority to maintain its health. So what can you do to have a positive impact on your dealership’s cash flow? Let’s break it down into an equation:
Negative cash flow is the sum of three major problems – Inefficient processes, inconsistent flow of cash, and ineffective payment options.
Let’s look at what you need to add and subtract from your business office to ensure positive cash flow.
Subtract: Mailing AR Statements and AP Invoices
If we look at our negative cash flow equation, this hits all three. Spending hours of time printing documents and stuffing and mailing envelopes makes this process inefficient. Then, you’re left to wait for your cheques to clear or payments to be mailed back, leaving cash flow on an unpredictable timeline.
Ultimately, this stems from having ineffective payment options for both your dealership and your customers. These antiquated processes are keeping your dealership from optimizing cash flow, but it doesn’t have to be that way.
Add: Digitized and Streamlined Payment Options
Don’t let payment options, or lack thereof, hold your money hostage. Give customers and vendors digital payment options on invoices to make the transaction quick, easy, and painless. When you email an invoice with a link to pay online, you remove the customer’s headache of mailing you a cheque, and you get your money faster.
In your dealership, cash (flow) is king, meaning your business office must do everything in its power to optimize it. To make sure your business is set up for financial success, you need to subtract bad processes like mailing statements and add processes like emailing invoices.
So, if you can give your dealership the best possible chance for positive cash flow, why wouldn’t you?
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