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In a recent interview, CPA Michael Berger, founder of Michael J. Berger & Co CPA’s LLP in Ronkonkoma, NY, was asked to explain how accountants can help small businesses increase cash flow.For more information please visit http://www.bergercpa.com/
When asked to comment, he said, “The reality of the situation is that every small business owner is going to face cash flow problems at some point. Accountants are on the frontline to work with small businesses to increase and maintain cash flow.”
One of the most important ways that accountants can help with cash inflow coming into a small business, according to Berger, is through creating a cash flow forecast.
“An experienced accountant will be able to use a cash flow forecast to pinpoint current and future problematic areas. Accountants then work with small business owners to come up with an action plan to address any issues of money coming in and out of the business,” he said.
One problematic cash flow area, Berger says, could be in the way businesses pay their suppliers.
When asked to elaborate, Berger said, “Accountants can help small businesses pay their suppliers strategically. For example, a better business decision might be to pay suppliers in the maximum time they allow, which is typically between 60 and 90 days.”
Berger added that this will allow for a business to collect on receivables before payment and to avoid spending money on taking out a line of credit.
“But then again, sometimes suppliers will offer incentives for early payment, often within 14 days after an invoice has been issued. A professional accountant will determine if waiting to pay or paying early use the incentive for a specific supplier will help increase cash flow,” he said.
Another way accountants help small business owners ensure cash flow is by advising in pricing their products based on market fluctuations.
“Understandably, the owners of smaller enterprises might be hesitant in increasing their prices to reflect market conditions out of fear of losing business. However, an important point overlooked by small business owners is that customers expect an uptick in prices,” he said.
Berger added that price hikes should be made gradually and consistently, instead of a steep increase all at once.
Source: http://RecommendedExperts.biz
Contact Info:
Name: Michael Berger
Email: Send Email
Organization: Michael J Berger & Co CPA's LLP
Address: 3425 Veterans Memorial Hwy, Ronkonkoma, NY 11779, USA
Phone: 631-471-3400
Website: http://www.bergercpa.com
Source URL: http://RecommendedExperts.biz
Release ID: 349106