• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Corporate Tax Return Prep

Corporate Tax Return Prep

Let Us Handle Your Corporate Taxes

Call us: 781-849-7200
contactus@worthtax.com

  • Home
  • Corporations
  • S-Corps
  • Partnerships & LLCs
  • Business Planning
  • IRS Tax Problems?
  • Why Worthtax?
  • Our Tax Team
  • Tax Guide
  • Secure Client Portal
  • Blog
  • Resources
  • Locations and Hours
  • Schedule an Online Appointment

With a Possible Recession Looming, You May Want to Review Your Cash Flow Process

June 29, 2022 by Alex Franch, BS EA

You May Want to Review Your Cash Flow Process

If you’re a business owner who has been through a recession before, you know that smart cash flow management is absolutely crucial. If you’re a new entrepreneur who hasn’t been through an economic downturn, you may be less familiar with how quickly your finances can be affected.

To protect yourself and keep your business operating, here are the things you need to know about adjusting your cash flow process to match the economic environment.

Evaluate Your Expenses

When cash is short, it’s time to take a magnifying glass to your expenses, both to ensure that you’re being charged appropriately and to determine which of the invoices coming in should not be repeated. It’s easy to spend money when cash is coming in, but once things get tight you may need to adjust your budgetary line items and start chatting with employees about whether specific expenditures are actually needed.

Evaluate Your ExpensesYou may also want to think about how spending decisions are approved, limiting authority for purchasing above certain amounts or requiring sign-off from management to ensure that you’re staying within your means and available resources. Though staff may object to losing their travel or entertainment budgets, an economic downturn should reclassify them as luxuries that can be cut back or eliminated rather than necessities. The same goes for meeting expenditures.

Other expenses can be adjusted in a way that limits the impact on your staff but still helps your bottom line. Fixed costs for transportation can be shifted from purchasing new vehicles to contracting for a fleet leasing program. Doing so keeps your capital in your bank account, where it can be put to better use when money is tight.

Vendor relationships can become strained when you find yourself having to either cancel or downgrade a contract and even more so if you’re unable to pay your bills. The best way to approach this is upfront and with honesty. The more open you are about your cash situation, the more likely you will be able to work something out in the short term and maintain or resume the relationship for the long term.

Make It Easier for Your Clients to Pay Their Bills

When you insist on issuing paper invoices and getting paid by check, you automatically slow down the process of getting paid. Make it easier for your clients to pay you by setting up an online payment option and billing them electronically. If you have clients you’ve been allowing to slide in terms of on-time payments, it’s time to have someone within our organization – preferably somebody in management – contact them directly. As for new clients, if you haven’t been conducting credit checks before providing them with goods or services, it’s time to start. It’s better to turn away business that might not get paid for than to get stuck holding an uncollectable bill.

Involve Your Employees

Though your financial challenges are ultimately yours to shoulder and solve, that doesn’t mean that your employees should not be kept in the loop about the realities of your day-to-day situation, and this is particularly true for the core group upon whom you rely most. Not only is it a good idea to talk with them and explain why you’re putting more restrictive policies in place, but in doing so you may find that they have ideas for how to boost revenue, ease cash flow, and save money. It’s the people who are on the ground who see where money is being wasted and where cost-cutting changes to staffing and expenditures can be made. Use this valuable resource!

If you are encountering cash flow challenges and would like additional guidance, contact our office today to set up a time for a consultation.

  • Facebook
  • Twitter
  • Buffer
  • Evernote
  • AOL
  • Gmail
  • Print Friendly
  • Yahoo Mail
  • LinkedIn
  • StumbleUpon
  • Tumblr

Filed Under: Entrepreneur Tagged With: Cash Flow Process, Recession, Review Your Cash Flow Process

About Alex Franch, BS EA

Ready to get started on your corporate taxes?

781-849-7200      Email

Schedule an Online Appointment      Upload Files to Our Secure Client Portal

Primary Sidebar

  • Home
  • Corporations
  • S-Corps
  • Partnerships & LLCs
  • Business Planning
  • IRS Tax Problems?
  • Why Worthtax?
  • Our Tax Team
  • Tax Guide
  • Secure Client Portal
  • Blog
  • Resources
  • Locations and Hours
  • Schedule an Online Appointment

Calculate Your Estimated Tax Responsibility

tax calculator, calculate your taxes

RSS Recent Posts

  • If Your Business is a Delaware Corporation, There Are Important Upcoming Tax Deadlines to Be Aware Of
  • How Shopify Upended the eCommerce Sector in the Best Possible Way
  • March 2023 Business Due Dates
  • Planning On Buying a New Electric Vehicle and Claiming a Tax Credit? Better Read This First
  • What You Need to Know About Converting an S Corp to a C Corp
  • Consequences of Filing Married Filing Separate
  • 2023 Standard Mileage Rates Announced
  • February 2023 Business Due Dates
  • Understanding Tax-Deferred Investing
  • How the FTX Crypto Bankruptcy Was Born From a Complete Lack of Accounting Controls

Get started now on your corporate taxes.

     781-849-7200      

            Email            

   Online Appointment  

Upload Files to Our
Secure Client Portal Here
Receive a Free Subscription to Our Newsletter

© Copyright 2023 Worthtax · All Rights Reserved