5 Cash Flow Tips for Retailers in October

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During the next few months, sales will boost and profits will increase your business’s cash flow. The bulk of your revenue most likely comes in the last quarter of the year, and you need to be wise about what you do with it! Instead of stashing it all away, take advantage of this opportunity to prepare for the less fruitful months to follow. Here are 5 tips on where you should spend your cash flow.

Revisit your Annual budget

Examine your current budget and revise it based on the year’s results. Even though the upcoming holidays bring an increase in cash flow, don’t count on everything selling if you have a surplus of inventory. Plan out your end-of-the-year sales and promotions so you are sparse in January. How the year turns out, for better or worse, will be a road map for predicting next year’s revenue and expenses. Whether you need to expand or scale back, recising your budget will help you more accurately serve or customers.

Invest in Tax Planning

Be proactive and prep for potential liability when tax season comes. Reserve funds to ensure you can meet all financial obligations if the tax man comes knocking at your door. Protect yourself from any possibility of a shut down, and don’t forget to pay your quarterlies on time.  

Take Advantage of Vendor Discounts

If you have the funds, use your vendor discounts for early payment on your large holiday inventory purchases. You could see a significant ROI and profit boost. In addition to gaining a good rep with your vendors, you’ll likely overcome the financial toll over the next couple of months.

Make Large Purchases before the New Year

This is the time to invest in new infrastructure or other business-building items, if the money is available. Not only can it lower your overall tax liability, but this time of year is when such investments produce the greatest results.

This is something that takes careful planning though, and you must take cash flow into consideration. At the beginning of each year, get in the habit of writing out your wish list. If the money is available in October, move on the opportunity.

Pay on Debt

With the upcoming cash flux, be sure to pay on expensive credit cards and toward debt. It’s better to do it now while it won’t hinder your other business goals as much. Like the vendor discounts, the money saved on interest will be worth it for your bottom line.