Unless a business owner has a healthy cash reserve it’s likely that cash flow will be uneven in the first months and years after launching a new business. Purchasing Pennsylvania business insurance can protect the business from having to use business funds to recover from disastrous events like extreme weather, fire or accident.
A small business owner can help to maintain smooth cash flow by carefully managing finances.
- Submit sales invoices as soon as possible after goods or services have been provided.
- Offer incentives for upfront payment and speedy payment of sales invoices.
- Chase overdue sales invoices until they are paid.
- Pay purchase invoices on the date they fall due.
- Negotiate the longest possible payment terms with suppliers.
- Operate frugally, eliminating waste and unnecessary spending.
- Know what your costs and expenses are, and seek every opportunity to reduce them.
- Monitor bank accounts constantly and transfer any spare funds into accounts that earn interest.
A business that does not manage cash flow well or carry Pennsylvania business insurance protection for the risk of disaster is in a vulnerable situation. The cost of accidents and mishaps can drain business capital and without funds to sustain it the enterprise may be forced out of business.