Like for-profit businesses, non-profit organizations must be mindful of their cash flow to stay afloat. There are some similarities and some challenges that both organizations face when it comes to managing money. But some unique characteristics can make cash flow management difficult for non-profits.This article will explore 10 tips to help manage your cash flow as a non-profit business in Mississauga.
Make a budget and stick to it.
It seems like an obvious one, but it's worth repeating. Having a budget is essential for any business, for-profit or non-profit. But it can become important for non-profits, who often have less wiggle room regarding finances. Once you've created a budget, stick to it as closely as possible.
Have a plan for unexpected expenses
Even with the best budgeting in the world, there will always be unexpected expenses. Make sure you plan how you will cover these costs if they arise. This could mean having a line item in your budget for "unexpected expenses" or setting aside a certain amount of your money each month to cover them.
Track your income and expenses regularly
It is another one that seems obvious, but keeping track of your income and expenses is important. This will help you spot any potential cash flow issues before they become too big to handle.
Pay all the bills on time to avoid late fees
This is a good rule of thumb for any business, but it's especially important for non-profits. Late fees can quickly eat into tight budgets, so make sure you pay your bills on time.
Keep an emergency fund for unexpected costs.
As we mentioned before, unexpected costs will always pop up from time to time. Your emergency fund will help you cover many costs without breaking the bank.
Work with a professional accountant.
A professional tax accountant or bookkeeping services from a trusted accounting firm like GTA Accounting can be a valuable asset for any business. Still, they can be especially helpful for non-profits. They can help you navigate the often complex world of non-profit accounting and ensure you take advantage of all the tax breaks and deductions available to you.
Cut back on unnecessary spending.
This is a good tip for any business, but it's especially important for non-profits. When money is tight, it's important to cut back on any spending that is not absolutely essential.
Make use of fundraising opportunities.
Non-profits often rely on fundraising to help cover their expenses. Now is the time to start if you are not already taking advantage of fundraising opportunities. You can do many different types of fundraisers, so make sure to research what would work best for your organization.
Manage your debt wisely.
If you have debt, make sure you manage it in the best way possible. This means making your payments on time and in full each month. It also means being mindful of how much debt you are taking on and making sure you can afford the payments.
Seek professional help if needed
If you are struggling to manage your cash flow, don't be afraid to seek professional help. Many professionals specialize in helping businesses with their cash flow. Often, it takes a few sessions to get back on track.
While cash flow management can be challenging for any business, there are some unique challenges that non-profits face. By following the tips above, you can help ensure that your non-profit can manage its cash flow in a way that is both efficient and effective. If you need help regarding cash flow management, contact us today!