How Financially Fit Is Your Business?

A healthy business requires more than strong sales and top-notch products and services. Without a close eye on your financial operating cycle — beginning with receiving payments and ending with investing funds back into your company — you could jeopardize your ability to pay your bills and fund growth.


Review each stage of your financial operating cycle to find ways to become more efficient and profitable.

1. Receive payments

Having an efficient way to handle receivables is critical to staying financially fit. Online invoicing services that let you send bills and receive payments electronically, such as Popmoney®, can help expedite payments into your account and minimize the risk of invoices becoming lost. Make it easier to receive payments by accepting the methods most convenient for your customers, including credit and debit cards and electronic funds transfer.

2. Deposit, monitor, and manage cash

Consider banking tools that can help you save time and optimize your cash management. These include remote deposit, which lets you move checks into your account directly from your desk, and sweep services, which automatically direct excess funds toward investments or to pay down outstanding credit balances. You may also be able to download account information directly into financial management software to help streamline your record keeping.


Explore financial software and online resources that can help you better track and forecast cash flow long-term. These do not have to be complex — some spreadsheet templates can help project your cash flow over a 12-month period. Compare your monthly expenses and sales figures against your projections and adjust your forecast if your numbers are significantly higher or lower than expected.

3. Make payments

Paying bills electronically can expedite transactions and enable you to see when payments leave your account. This helps avoid time lags associated with check payments and can give you a better sense of your account balance. Some electronic billing services allow you to set up recurring payments for amounts that are the same each billing period and to receive alerts before payments are due.

4. Fund purchases

Choosing the right financing vehicles for business-related purchases can be critical for maintaining a healthy cash flow. Term loans, which are typically paid over a fixed period, are suitable for funding long-term expansion such as opening new locations, making leasehold improvements, or purchasing equipment; a line of credit can be tapped into and replenished on an ongoing basis to provide flexibility to meet short-term cash requirements (seasonal inventory purchases or unanticipated expenses). With interest rates still low, loans and lines of credit can be particularly beneficial for financing purchases while preserving existing funds to meet other obligations.

5. Invest in your company

Be sure the purchases you make align with your business objectives and help strengthen your company long-term. If you are considering an equipment purchase, have a clear plan for how it will enable you to be more profitable. For example, a parts manufacturer might buy a new milling machine to help speed up production and boost sales. If you plan to hire employees, consider how the additional expenses will balance with the capabilities and expertise they will bring to your business.

More information

We are committed to helping your business succeed. Our dedicated business banking professionals can help you find the right product to meet your business’ needs. To learn more, please call 1-800-428-7463, visit us online, or visit your nearest Citizens Bank Branch.


Disclaimer: Views expressed may not necessarily reflect those of Citizens Bank. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.


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