Cash is a precious commodity for every small business. The key elements that drain cash are:
Some of these payments have flexibility while others don’t. An efficient bookkeeper will identify areas of opportunity in payment terms. Leading bookkeepers have relationships with vendors that help them negotiate good terms for their clients. Oxford Management has helped many clients develop better payment terms. They have also helped develop fall backs for times of lean cash flow.
Accounts payable and the cyclical business
Many businesses have a significant amount of cyclicality. As an example, most retail businesses see a hockey stick increase in sales in the fourth quarter. This cyclicality puts special stress on the finances of the business. Most businesses can get good terms if they pay promptly. However, the purchases can be significant at the end of year. This requires special planning for accounts payable. Oxford Management does a diagnostic that helps businesses forecast their cash needs during the cyclical portion of the year. This has helped businesses develop good credit ratings and meet their expenses comfortably.