Basics of Cash Flow

Before managing cash flow, you will have to know the basics of this domain. The fund movement from and to your account should be tracked on a regular basis. It can be weekly, monthly or quarterly. The shorter the time interval the better you can keep a trace. When it is not possible for a business to do a voluminous check, this job is outsourced to a cash flow management agency. It can also be done by an in-house finance management team.

Here is the list of basics you need to know before deploying your resources for cash flow management.

Positive Flow

Cash entering your business account is considered as positive cash flow. It can be generated from sales and accounts receivable.

Negative Flow

It is exactly the opposite of the former term. It is depicted as the cash flowing out of your business account. It can be due to payroll, expenses, etc.

Good Cash Flow Doesn’t Represent Profit

A considerable inflow of cash does not mean that a company is earning profits. It needs to be compared with inventory, capital expenses, taxation, accounts payable, etc.

Breakeven Point

This is the point where cash inflow and cash outflow will become equal. Your business will neither make a profit nor a loss.

Best Cash Flow Management Tips

The first tip from an experienced cash flow management expert will be to measure all these basic points. From an expert’s view, you cannot control and manage what you cannot measure. Let us check the best tips followed by the leading cash flow management departments of big companies.

1. Anticipation is the Key

We all know that the future is absolutely uncertain, but our experiences help us mitigate loss also. It means that you can anticipate the future to some extent and can manage cash flow. Account records should be maintained accurately for the purpose.

On considering checking the account records, you will discover the incoming expenses, as well as the monthly cash flowing in. In a nutshell, you will be able to keep a tab on all the basic cash flow management pillars at a stretch. This is what an expert suggests you do. Anticipating large expenses and preparing for them beforehand will surely help you manage your cash flow excellently. Anticipate and track the seasonal and painful trends to stay prepared.

2. Improvement of Accounts Receivable

It is obvious that your cash inflow will make your account progress in a positive direction. Use an intelligent cash flow management platform or hire a service to find out the outstanding invoices, pending receivables, etc. You can work on those elements and encourage entities to pay quicker. Plan a reward for those who are clearing their accounts faster than usual.

On the other hand, you need to switch to digital payment methods. Relying on checks can be a hassle because it can take a lot of time to receive and clear one. Digital payment methods make it faster, easier, and error-free. There is no possibility of receiving bounced checks. In fact, you can also reduce labor and save on resources.

3. Account Payable Process Management

It is important to check on the cash outflow section for managing your cash. Even if you are continuously filling a tank with the taps open, you will not be able to estimate its capacity. This is why cash outflow management is also very important. The accounting department must keep tabs on the outflow of cash and manage accordingly.

This is where investing in smart accounting software can be very helpful. Many businesses outsource cash flow management services to ensure proper management of the accounts payable. Overlooking unpaid payments will pile up, causing stress to your financial foundation.

You can also maintain a positive relationship with vendors and get some slack in the payment process. It will also help you get some time to organize your payment process and to get control over the accounts payable section.

4. Cash Reserve for Emergency

Another prime element a company has to follow is to maintain a cash reserve for emergency purposes. Uncertain and unprecedented events can cause a massive outflow of cash causing immense financial stress. This is where maintaining a major cash reserve can be a great support for the future. It will also not put stress on your business accounts during the time of need.

An emergency cash reserve should be a long-term plan where small amounts of money should be invested on a regular basis. Go for an insurance plan for certain mishaps so that you can get financial aid at the right time. A general rule suggests maintaining a cash reserve that will enable your business to run for at least 6 months.

5. Do Not Keep Cash Idle

Idle cash will not lay eggs. Invest and use it for a good return. The thumb rule for increasing cash flow is investing idle money. Large balances eating dust in non-interest generating accounts will do nothing apart from offering financial security in the future. If you have the cash to spare, use it to roll.

Business expansion and other ventures can deliver the best outcomes when it comes to using idle cash. You can use it to reduce debts and save on interests levied. It can be used to renovate your business processes to reduce future expenses.

6. Setting Timelines

A haphazard payment system can cause chaos. It can be a daunting task to track payments and receivables at the same time. Proper cash flow management can be only done when you set a timeline for all kinds of cash inflows and outflows.

Managing these cash flow aspects in accordance with time will give you insights to make proper decisions. You will also get notifications based on the payments pending or receivables yet to be cleared. In fact, you will also be able to get your clients and customers to follow a timeline regarding payments to manage your cash flow perfectly.

7. Cash Flow is Bigger than Profit

This is probably the biggest myth that successful entrepreneurs like to bust. Making a profit will not always be the right thing, but cash flow is universal and relentless. Maintaining a proper cash flow is mandatory to understand the profit level of your business.

Analyze profit and determine shortfalls, payables, and receivables at the same time. Improperly calculated profit does not always represent the actual profit you are making. Hence, you need to consider managing cash flow from day one.  

8. Cash Flow Management Monitoring

Either you can manage and monitor cash flow on a regular basis or assign the duty to someone you trust. Always choose a trusted employee to manage cash flow and to gain insights from every cycle. The employee or person should be well aware of the different aspects of finance, accounts, etc. and should be an expert in understanding financial terms and recognizing errors.

9. Forget Relying on Spreadsheets

It is time to upgrade from spreadsheets to an intelligent cash flow management platform. Do not limit your cash flow management strengths. You can hire a service to design a finance management platform where you can easily manage cash. A personalized software platform to manage cash is what you need to increase your control on cash flow.

Conclusion

Considering the issues related to cash flow management, it is clear that you will need an expert team or the support of an intelligent finance management software solution. Discover the best service for financial management software development. These days, leading brands offer software solutions that can be personalized based on your specific requirements.

There are excellent tools that many financial management services use to generate reports and to meet the specific requirements of a client. You can hire a service or can employ an in-house team for the purpose. It all depends on your budget, volume of work, and confidentiality. Make the right decision and manage your business finance efficiently. 

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While most people prefer Google for being rich in information, Google has been facing criticism and allegations recently. Sundar Pichai, the CEO of Google even testified before the US Parliamentary Committee over these allegations. The concerns that were raised in this meeting were regarding data protection policies. While Pichai dodged these questions with well-worded answers, there is still some fogginess concerning the matter. 

Oddly enough, the European continent is not a big fan of Google, despite people still preferring to use the search engine. Constant cases of Google being penalized and having to follow strict European Union regulations is proof of this. However, people still haven’t given up using the search engine. 

Rand Fishkin, the founder of Moz, conducted a little study to find out if Google is the most preferred search engine in not only the US but Europe and the UK as well. The European Union claimed they have been putting constant effort into finding an alternative to Google. Fishkin’s data, however, contradicts these claims. 

To make all of this clearer, Jumpshot, which is an advanced marketing analytics platform, provided Rand Fishkin with some statistics. These stats suggest that people from the European Union and the UK make use of Google Search a lot more than those in the US. The stats claim that while only 68.30% of people in the US use Google as their primary search engine, 69.27% of people use it as their go-to search engine in Europe as well as the UK.

The data taken and analyzed from January to September, 2018, , shows that Bing, Yahoo, and other search engines have constantly failed to erode Google’s popularity. 

Jumpshot analyzed around 252 million searches in 26 European countries, except for Malta. The research agency also retrieved 73 billion search records from the UK, which was the largest sample. 

Based on the individual analysis made for European countries along with that of the US, the highest search market share for Google was in Germany at 71.8%. The lowest was in Spain at 67%. And, as mentioned earlier, Google’s search market in the United States was 68.30%. 

If we consider Google Images, YouTube and Google Maps as separate entities, Google’s parent company, Alphabet, has an average, overall market share of 90% in both the US and the EU. 

Additionally, when you look at the graph, the data clearly suggests how Facebook, Twitter, Amazon, DuckDuckGo, and Pinterest only have 9% of the market share, even after combining all of their market shares. 

If you look at the data, it clearly indicates that Google is taking over the search engine landscape and outsmarting the other search engines. While Facebook and Twitter would like to claim they are becoming more popular in the search market, these stats make those claims questionable. However, the searches on these platforms do not qualify for a parallel analysis with Google. This is because the searches that take place on these e-commerce and social media platforms are either for products or for individuals. 

Jumpshot also provides insight into data for website owners, which is more from the user’s point of view. Data based on 100 billion searches made in Europe, the UK, and the US shows that the average click-through rate for websites on smartphones and desktops has been constantly ebbing.  

Google has also been causing a sharp decline in the click-through rate for websites that hold the top 3 ranks in the organic SERP results. Jumpshot suggests that ever since Google introduced the Instant Answers box and Google ads, it has become difficult for the top 3 ranking websites to get the expected Click-Throughs. Since click-through rates govern the survival of a website, we can say that Google is causing a threat to these websites. 

If you take a look at the graph below, you will notice a drop of 3.3% and 2.3% in organic traffic when compared to the desktop search result trends in 2016 and 2018 in Europe and the US.

Moreover, when we talk about data for mobile devices, sadly, it isn’t good news for website owners either. The graph below shows a drop of 4.8% and 5% when you compare the data of 2016 and 2018 in Europe and the US.

The country with the lowest desktop average click-through rates was the US at 60.4% with the Netherlands coming in  second at 61.3%.

The stats for mobile click-through rates were even more alarming. Finland had the highest click-through rate for mobiles at 43.7% and the US had the lowest at 29.7%.

It’s apparent that Google features like Instant Answers, Google ads, and Knowledge panels are trying to dominate websites for clicks on both mobile phones and desktops. Furthermore, the data for 2018 makes it clear that there is a rise in the number of people who click on paid ads while using their mobile phones or desktops. 

It’s obvious that Google wants to prioritize its features over websites that are displayed in the organic search results. 

Click-through rate is an important factor but Google is making websites strive harder to optimize their content to rank #0 in Google Search. Websites may secure the position with Instant Answers, but rarely does this result in traffic to the website. This is because whatever users are looking for appears right in front of their eyes without them having to visit the website. Consequently, websites are facing a serious threat from these 0 click-through results. 

Since Google is the master of search, it’s important to find new ways to reward websites that rank at #0 position for Instant Answers. We saw this happen when website owners witnessed benefits even as the page would load in Google’s server with AMP. Furthermore, Google allowed webmasters to put ads on their AMP pages, and this benefited the websites more.

When we look at all the graphs, it points to Google having quite a monopoly on the search engine landscape, putting other platforms to shame and pushing its SERP features to the top positions.

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It’s important to be displayed on the first page of the search results for a good number of people to find your page online. This is how you can increase your online sales. SEO strategies help achieve this goal. If you’re new to the concept of SEO, the tips provided below will help you optimize your website without bringing up complicated, technical terms. 

Understand your target audience

Your business significantly depends on your target audience. So, it’s important to know what they are looking for. Google strives to provide people with the most useful information when they search for something. This means, you have to know what terms, related to your industry, people search for and what are the most searched topics. 

When you know your target audience and what they look for, it becomes easier to come up with strategies to provide them with what they want and keep them satisfied. This also significantly matters if you’re selling products since more people visiting your website means increased chances of online sales. 

Analyze your competitors

Now that you know what your target audience looks for, you have to see what are the top results for their queries, and understand your competitors. Once you do that, analyze your competitors’ websites and see how they provide information. This should give you a fair idea about what your website lacks so you can work on it. 

Furthermore, when you analyze a few websites in your niche, you can note down what you think each website lacks. After that, you can work hard to come up with content that provides your target audience with a unique as well as a more complete solution. 

Basic SEO

It might seem intimidating to take up the responsibility of optimizing your website all by yourself. Whether you decide to optimize your website or get someone else to do it, knowing the basics will help you identify problems and troubleshoot when needed. Sure, it looks like a lot to comprehend, but once you read the below-mentioned points carefully, you shouldn’t find it so complicated. 

Keyword research

Keywords are a set of words that a user would type into the search bar of a search engine. For instance, if you want to look for recipes for kale, you would most probably type ‘kale recipes’. For every industry or niche, there would be a set of keywords that are searched more than others. So, the first step you need to take is conducting keyword research to find out what keywords you can rank for and be displayed for on the first page. 

Don’t select keywords that are most searched and have too much competition. This will require much hard work. Instead, for starters, look for low competition and high search rate keywords in your field. Use tools, like Google Keyword Planner to look for the most suitable keywords. These tools help find keywords that signify a gap in the market that you can fill in and rank for. 

Mobile friendly website

These days, most people use their smartphones to access different websites. So, Google has made mobile-friendliness a major ranking factor. This correlates with the bounce rate. Bounce rate means a user entering your website and quickly exiting. This happens when the user is not happy with the provided information found on the website. 

Likewise, if your website is not mobile-friendly, users have to wait for a while for the page to load, and then turn the horizontal mode on. Instead of putting up with this, users will exit your website and visit some other website, which can be a loss for you. This is why you should make sure your website is optimized for mobile users. 

Other factors

Besides these two factors, you should also focus on other basic factors to make sure your site is optimized for Google searches. Here are some points to keep in mind when optimizing your website. 

1. The title of your articles should be between 60 to 70 characters. Include the focus keyword at the beginning of the title and use words like best, amazing, top, etc. in the title. 
2. The meta description should have the focus keyword in it. Don’t ever leave the space for meta description empty. 
3. The focus keyword should not be overstuffed. However, including it in the first 100 words of your article helps. Use a variety of LSI keywords. 
4. Optimize images by adding the focus keyword in the ALT TEXT box. 
5. Make sure the URL is short and makes sense. Add the focus keyword in the URL as well. 
6. It’s recommended that content be over 1000 words, since Google prefers long form content. 

Blog posting for linking

If you want to increase the authority of your website, you should consider posting blogs on websites with more authority. All you have to do is send an email to the webmaster asking if he would allow you to write a guest post. Websites that accept guest posts usually let you add 2 links to your website, which helps in building links and ranking your website better. Make sure you post blogs on websites that are relevant to your niche and have good domain authority. 

Local SEO

Local SEO helps you increase your visibility when a person makes a location specific search. This means, when people find you in the search results, you have more chances of customers visiting your store. Here are some ways of optimizing your website for better local searches.  

Google My Business

To create a Google My Business account, you need to sign up. You’re also required to provide the address of your store. When you do that, a verification code is sent to your store via mail. When you receive the code and enter it, you then have a Google My Business account. On Google My Business you can provide all the details about your business and choose a specific category. This will help you show up in the local search results, like ‘Turkish restaurant near me’. 

Google Maps

Claiming your business by providing your address on Google Maps is also quite important these days. If you have an offline business, people will try to find a way to you through Google Maps. If your address is not available on Google Maps, you can lose many potential customers. 

Other local websites

Getting your website listed on various other local websites also helps more people reach you. For instance, if you run a restaurant, getting listed on Zomato is a good idea. 

Google Search Console 

If you want a tool that helps you analyze the performance of your website for free, you should know about Google Search Console. Google Search Console provides information about well-ranked keywords that are relevant for you and addresses many other issues. 

These are some of the SEO tips that small businesses can start following in order to rank better in Google’s Search Results Pages. If you still find these tips tricky, it isn’t a bad idea to hire an SEO agency. In fact, these tips will even help you better understand what the SEO agency does for your website.

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