5 Cash Flow Tips For Retailers In October

By Bob Phibbs

retail cash flow tips for octoberThe holiday season is about to begin and every retailer is glad for it because cash flow will seem to get better. This post is more where to spend that cash flow than how to hold onto it.

That's because, as I stated in last month's revenue flow post, for the next few months, revenues will increase, profits will blossom and any cash flow strain will become a distant memory. Most retailers will realize the bulk of their profits in the last quarter of the year.

Still, the prudent retailer will take the opportunity to plan for the leaner months that will follow in the New Year after the party's over. 

5 Cash Flow Tips For Retailers In October

Revisit Your Annual Budget

An examination of your current budget and a revision based on actual results will give you a more realistic snapshot of the coming months. If you are overbought, don't hope it will all sell - figure out promotions so you are lean in January. For better or worse, you will be able to plan your revenue and expenses accordingly. You can scale back if you anticipate lower revenues or expand your product line if you are having a great year. Either way, your business will be better prepared to accurately serve your customers.

Invest in Tax Planning

The tax guy always comes at the worst time. Now is the time to face the issue in a straightforward manner.

Simply knowing your potential liability is half the battle. It is especially important to be proactive about these matters and reserve the proper amount of funds as the I.R.S. has the power to shut you down if you fail to meet your obligations. And whatever you do, you must pay your quarterlies on time!

Take Advantage of Vendor Discounts

Large inventory purchases are the norm for his time of the year. If funds are available, take your vendor discounts for early payment. The ROI can be significant and boost profits enormously. Any temporary squeeze will be loosened over the next few weeks. In addition, you’ll gain some good cred with your vendors.

Make Large Purchases before Year End

Aside from lowering your overall tax liability, the purchase of new infrastructure or other business-building items is an investment in your business at a time that will yield the greatest results.

Certainly, these purchases should be planned out ahead of time and take cash flow into consideration so, be sure to make a wish list at the beginning of the year and be ready to act if the money becomes available in October.

Pay Down Debt

It's always a good idea to pay down expensive credit cards, but especially so when the payments will not put a crimp in your other business plans. Just like vendor discounts, the monies saved on interest can significantly strengthen an otherwise anemic bottom line.

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A Final Thought

October is the time when you as the owner sees your business thrive. There is plenty of stress and some aggravation but these cash flow tips should be taken as your opportunity to boast your profits as a retailer.

Looking ahead, planning and taking advantage of opportunities at this time of year can make all the difference down the line between celebrating the New Year or becoming despondent. Choose now so you will be happy.

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