Tips That Will Help You To Smooth Out Your Restaurant’s Cash Flow

<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhp2_tzYDRzqZMDjLk_SXOeGNEBjNGdAQMf9JHaiK7bcyKk7FVIAZSgVHB04ZPAt37pFz8KJDllVrI_Cv8KyAKJqBOrw3imPfPAEhbGiSaNiwgR5kgiYyMrNLV-ciUK4O87s8CQsbjz3mE/s1600/restaurant+cash+flow.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhp2_tzYDRzqZMDjLk_SXOeGNEBjNGdAQMf9JHaiK7bcyKk7FVIAZSgVHB04ZPAt37pFz8KJDllVrI_Cv8KyAKJqBOrw3imPfPAEhbGiSaNiwgR5kgiYyMrNLV-ciUK4O87s8CQsbjz3mE/s1600/restaurant+cash+flow.jpg" width="224" /></a></div><div class="MsoNormal">A reputable accountant will tell you that a restaurant cannot survive without cash flow. If you don’t have the money to pay vendors, meet payroll, cover the rent or pay the utility bills, your restaurant won’t make it to see the next day. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">Because of poor cash management practices, a significant number of restaurant owners have experienced financial strains in their business. The following are some few tips on how to handle your income and expenses:</div><div class="MsoNormal"><br /></div><div class="MsoNormal">Avoid paying for everything at one go</div><div class="MsoNormal"><br /></div><div class="MsoNormal">Most people tend to pay all their bills at one go because they want to set aside some money. They write all their checks at once. This means that all the cash flow will be used up and any bounced checks might kill the relationship you have with your creditors. Every envelope containing a check should be marked with date it ought to be delivered. By putting them in such a pattern, you will ensure that they don’t crash into each other. The envelopes should be stacked according to priority. For example, the highest priority accounts such as rent, taxes and utility bills should be sorted out first because they can hurt your ability to do business if they are not dealt with early enough. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">Even though insurance payments and utility bills tend to have a grace period or a modest financial penalty, they should still be paid in due time. Having your lights turned off during the Saturday dinner rush can be quite costly. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">You should also look for any vendors who offer flexible payment options. Restaurant suppliers are usually open to the idea if the payments are scheduled. It doesn't really matter if they are small or not. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">Stick to reality</div><div class="MsoNormal"><br /></div><div class="MsoNormal">Any payments you make should be based on the revenue you have and not the sales you are going to make. Don’t assume anything, only work with what you have. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">Invest in a good payroll service</div><div class="MsoNormal"><br /></div><div class="MsoNormal">Payroll and sales taxes are the biggest drainers of cash flow. A good payroll service can do wonders for a restaurant business, especially in the collection and payment of payroll taxes. Avoid any unnecessary costs by letting the professionals handle your service. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">An innovative payroll schedule</div><div class="MsoNormal"><br /></div><div class="MsoNormal">A restaurant business is based in taking in daily revenue, especially on weekends. As a result, you will need to implement innovative cash planning to make sure that outflow is covered by incoming sales and cash on hand. In some states you can have a bi-weekly or bi-monthly payroll to assist you with your outflow. It’s important that you spread out your payroll periods.</div><div class="MsoNormal"><br /></div><div class="MsoNormal">Build relationships with reputable credit providers</div><div class="MsoNormal"><br /></div><div class="MsoNormal">By building a good relationship with your creditors, you will have access to working capital if your business is ever low on cash. This is a good way of planning for a rainy day.</div><div class="MsoNormal"><br /></div><div class="MsoNormal">Build a strong relationship with your banker</div><div class="MsoNormal"><br /></div><div class="MsoNormal">Even if your banker doesn't provide you with a loan or a letter of credit, they might offer you some assistance in cases of bounced checks or NSF fees. It’s important that your banker knows where you stand and how your business is going. They could provide you with help you need. </div><div class="MsoNormal"><br /></div><div class="MsoNormal">With smart planning and effective communication, you can manage your cash flow effectively.</div>

Tips That Will Help You To Smooth Out Your Restaurant’s Cash Flow

A reputable accountant will tell you that a restaurant cannot survive without cash flow. If you don’t have the money to pay vendors, meet pa...

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