Your small business is unique, but there are certain money-saving-habits every company should practice to improve finances and cash flow. We’ve pulled together some of the proven best practices that will set your company up to be more efficient and ensure you are on track to achieve heightened success. Make Reviewing Your Finances a Habit As a small business owner, you have taken on a range of roles and responsibilities that fill your days, weeks and months, but you may be forgetting one crucial step. No matter how confident you are about your business' financial well-being, this is something that needs to be reviewed regularly by adding a detailed financial review to your monthly or weekly schedule. Based on the time of year, level of demand, and the type of contract services you offer, your flow of income and expenses will likely vary from week to week and month to month. Having a clear understanding of your current, and projected, finances will help you make better decisions concerning your spending and budgeting. Additionally, this top money habit will help you better understand full-scale operations so you can determine what changes you can implement to inspire growth within your company. Create (and Follow) an Every-Dollar Budget Knowing the comings and goings of your money dramatically reduces stress and enables you to understand at any given time whether or not you should make a purchase, set aside additional funds to pay down an outstanding expense, or whether you will be able to cash flow your expansion plans. Budgeting seems obvious; however, in common practice, most businesses fail to implement this vital money-saving step. And even those that do often do not track exact spending, choosing to instead to round numbers off. For a successful business, you must create an every-dollar budget and then follow and execute that budget as exactly as you can. Whether you set up a monthly or quarterly budget, it’s crucial to determine your predicted income and known expenses to generate precise numbers concerning additional spending and savings. Creating and enforcing an effective budget may take time, but the effort spent is well worth the time. While you may initially think a budget is designed to restrict, it’s actually designed to free. Reduce Unnecessary Spending by Managing Your Inventory Comparable to a regular review of finances, you should also routinely review and manage your inventory. This is most easily accomplished through auto-generated inventory reports. By reviewing your inventory, you should compare what’s coming in, to what’s going out, and at what rate so you can identify cost-saving possibilities. From there, you can determine if there’s an opportunity to source items you need to restock more cost-effectively, along with how to adjust your future orders to meet changing demands. You may also need to re-evaluate and determine which approach to inventory management (LIFO, FIFO, FILO, or LILO) is most beneficial to your business. Plan Ahead for Tax Season By planning ahead, when the time comes to pay taxes, your finances aren’t hit with a huge expense all at once. You can use your taxes from the previous year to predict what you’ll owe the following season and regularly set it aside throughout the year. One of the best money habits you can put in place for yourself is to prepare for future known expenses, including federal and state taxes. We strongly recommend working with a Certified Public Accountant (CPA) to ensure you’re avoiding costly mistakes, taking advantage of all tax breaks, and correctly reporting all relevant activity. Take Advantage of Tax Deductions and Benefits Think of tax breaks as “free money.” As a small business, you have multiple money-saving opportunities when it comes to deductions and write-offs, and a CPA can help you find all of them. Invest the time to educate yourself on the benefits available to your specific company and industry so you can ask the right questions. Don’t hesitate to utilize programs and opportunities to help reduce the final tax amount owed. Adjust Services and Inventory to Meet Immediate Needs When you learn how to adjust your business to meet and consumer needs, your business will be ready for anything! During COVID-19, many small businesses found they needed to adjust how they offered their services while diversifying what they sold to meet the immediate needs of their clients. Staying flexible with how you offer services and adapting your inventory management practices are strategies that can help you grow your small business even after unexpected disruptions occur. Identify Unnecessary Debt and Prioritize Reducing It Debt management is a sign of a healthy business and dramatically impacts your ability to leverage debt in the future. Are you prioritizing your business debt? If you're not, you should be! One of your top goals should be to prioritize and reduce debt. Just as you would put money aside for taxes, you should be regularly making payments to work off debts - be sure to include these set payments in your budgeting plan. Pay Out Your Own Salary on a Pre-Set Schedule If, at any point, you plan to consider taking on investors or debt in order to grow your business, you will need to provide flawless financial statements. How you handle business profits and your personal salary are a part of that equation. Paying yourself a set salary is an incredible money-saving habit that only half of small business report doing. Just as you would pay an employee, you should pay yourself a fixed salary on a pre-set schedule. This not only maximizes predictability of your business and personal cash flow, it’s a fundamental practice of any mature company. How this happens can be done in a manner that makes the most sense for you and your small business. The goal is to view your business profit and your own pay as two separate items. Get Creative With Free Marketing Tools Available The implementation of a successful marketing campaign can boost the success of your business. Whether your small business is doing financially well or has fallen on hard times, marketing should be a priority. Traditional marketing can be pricey for a small business, and you should be taking advantage of the free marketing tools available to you. Social media platforms are a great way to find and connect with your customers without having to spend money. Through these platforms, you can create posts that are engaging and informative. You can also use location and audience tools to reach potential customers and clients. The philosophy of working smarter and not harder is the key to create this money-saving habit with your marketing. Utilize Invoice Technology to Improve Efficiency Traditional invoicing can get messy, be difficult to keep track of, and has limitations on customer interactions. Not all invoicing is created equal, and using the right invoicing app can help you track customer payment and manage data reports. Invoicing software, like InvoiceASAP, can improve payment efficiency and customer retainment. Invoicing software enhances business operations, saving you time and money. Manage Your Small Business with InvoiceASAP The most important thing you can do for your small business is to utilize InvoiceASAP’s affordable accounting and invoicing software, featuring valuable auto-generated reports. These reports will help you master many of the aforementioned top money habits to help you manage your business. Sign up for a FREE account today and discover how the InvoiceASAP platform can help your small business build smart money habits with data-driven insights.
In the past, it was typical for construction companies only to accept cash or check payments from clients. Today, improved technologies and resources make credit card and debit card payments an expected option for customers. According to the 2016 U.S. Consumer Payment Study, credit cards took the top spot in customers’ preferred way to pay, with debit cards coming in second. With mobile payments becoming more accessible, and the growing popularity of online banking and credit statements, it makes sense that 40% of the population surveyed revealed they prefer to pay with a credit card. So what does this mean for improving your business when it comes to invoicing for construction jobs? Being flexible with your accepted forms of payment can not only grow your customer satisfaction but also improve your cash flow. Here's what else you should know: Accepting Credit Cards Benefits Your Customers Customers want the ability to pay invoices quickly and easily, they want a record of their payment, and they want to be able to pay securely. There are multiple ways to have customers pay via credit card to secure a faster process for getting paid. Offering credit card payments in the field is one. Whether you decide to collect payment with a mobile credit card scanner for your tech to use at the job site, or email a digital invoice that includes a "Pay Now" feature, overall, clients will find it more efficient to pay via card rather than write a check or hand you cash. Plus, InvoiceASAP’s invoicing app functions with your mobile team’s existing technology. Another reason customers prefer credit card payments is that it gives them confidence about your company and about their payment itself. Showing customers you accept credit card payments, helps your small business appear more legitimate and trustworthy. Customers may also feel encouraged to use credit cards because of the protections and customer support they provide. It's comforting for clients to have access to a digital receipt, especially when a credit card company can also view the transaction. How Accepting Credit Cards Benefits Your Business In terms of how accepting payments is beneficial to your contractor business, the primary advantage is how quickly you'll see invoices getting paid. Credit card payments are processed easily and quickly while keeping transaction fees low. You can even pass transaction fees on to your customer, which is a common practice. Access and flexibility with payment methods means customers will pay sooner and money will hit your bank account faster. When your tech can take a payment at the job site, or when a customer can enter their credit card information on a digital invoice following the job, the payment will be processed much faster. If you're waiting days or weeks for checks to come in the mail and then clear, or handling excessive amounts of cash, you should absolutely be incorporating a credit card option for invoice payments. Another key benefit to credit card payments is the ability to know instantly whether the payment has been correctly processed. You can begin new jobs more quickly, without having to wait and see if the expected payment from your previous job went through. Additionally, if your business offers clients the option to pay in multiple installments, having a credit card option connected to recurring invoices can automate the process and help guarantee those payments come in on schedule. Available Tools for Managing Credit Card Payments A payment management system designed specifically for your construction business is an excellent resource. InvoiceASAP offers services - beyond just accepting payments in the field - that will make it easier to manage and grow your business. For example, with InvoiceASAP's invoicing platform, customers are easily able to make payments directly from the digital invoice. There's no phone call to make or additional websites to navigate, which simplifies the payment process and gets invoices paid out to you faster. For your regular clients, credit card payments from previous jobs can also be stored for the future. With InvoiceASAP's Card on File tool, you can save your clients' card information, allowing customers to submit a new payment immediately. Additionally, the online credit card payment can be tracked and viewed easily with the A/R Management tool. Not only will you see all of your invoices in one place, but you can sort unpaid invoices from paid invoices and view payment details in real-time. This platform allows you to look-up any needed information if questions arise in the future. Overall, giving your clients the option to pay with credit cards opens up new opportunities to grow your business and secure payments quickly. Consider utilizing a mobile invoicing service such as InvoiceASAP to guarantee your credit card payments are processed efficiently and are effortless for you and your customers. Try InvoiceASAP today with a FREE account.