Gain insights for accessing capital, streamlining cash flow and protecting the financial health of your company from an expert who works with businesses like yours every day.

Protecting your business’s cash flow and maximizing your working capital is more important than ever, but identifying and implementing an effective financial strategy for your small business is never easy. While there are many different financing solutions and cash management tools available for companies, selecting the right ones for your business can take time and careful planning.

In this article, Adam Rosenbaum, Vice President and Branch Manager at Santander Bank, shares the insights he’s gained from working with small businesses every day. He’s seen firsthand the tools and solutions that have worked for small businesses at every stage of their growth evolution and provides strategies that can help you navigate your business’s financial journey.

In the following sections, discover best practices for managing your small business finances and gain tips for accessing capital, accelerating your cash flow, leveraging new partnerships, and growing your business.

Maintain Detailed Records of Your Business Finances.

The financial health of your business is a major factor in determining which financing and cash management solutions are right for you. Every business is different and having a clear understanding of your current financial position will allow you to pinpoint the direction and strategies that will help your business prosper.

In Adam’s experience, the only way to truly know where your business sits financially today is to know where you’ve been; keeping detailed, well-organized records of key financial information will give you a clearer picture of your business’s overall financial health. It will also make it easier to work with your partners, as CPAs, financial advisors, bankers, and suppliers will all likely be able to better assist you if you have these documents in hand. Key information can include budgets, balance sheets, payroll and inventory costs, accounts payable and receivable, and relevant tax information for the current period and for the past several years of your business.

Throughout the years, Adam has seen that the business owners who keep accurate, up-to-date financial records for their business and bring this information forward when working with their partners are able to access and leverage new sources of capital more quickly and efficiently. Adam explains: “Accurate business financials are so important. It informs everything we do for your business. With this information readily available, we can quickly identify and get you started with the right financing solution.”

One option available for small business owners is a part-time CFO who can help you organize your financial records and map out a strategic plan for your business. Many of these individuals have experience in large corporations and can bring this expertise forward to benefit your company. In addition to providing bookkeeping and accounting services, these CFOs for hire can offer high-level corporate financial advice at a cost that small business owners can afford.

Take Advantage of All the Tools Available to Your Business.

Adam also emphasized the importance of looking for every option available to your business, even if that means looking beyond traditional small business tools. While small businesses may not always consider cash management tools and financing solutions designed for larger companies, many business owners have needs and growth objectives that can be better served by these alternatives.

For example, if your business works with a high volume of checks, digital treasury management tools designed for commercial companies may make sense, as the check services capabilities could offer crucial visibility into your cash flow. Positive Pay features associated with these tools can also provide check-heavy small businesses with an added layer of fraud protection. As Adam noted, “when considering what tools are right for your company, what you do and how you do it is more important than the size of your company.”

Make sure you’re working closely with your financial partners to identify all of the potential financing and cash management options available to your business, even if these solutions aren’t specifically small business focused.

Look into Supplier Relationships to Benefit Your Business.

Some of the most creative financial solutions for your business can come from supplier partnerships available through your bank. In fact, over the years, Adam has seen these vendors emerge as key strategic partners for successful small businesses, complementing the existing team of advisors the business owners already had in place. “Suppliers like ADP and Fiserv can play such an important role in managing the day-to-day operations of your business and growing in the future.”

These partnerships can benefit your business in a variety of ways. Companies like ADP can streamline your payroll processing and provide valuable opportunities to plan and forecast future expenses. Merchant services suppliers like Fiserv can offer cutting-edge receivable solutions that allow you to accept and process payments from your customers in new ways so the business can get paid faster. Small businesses can also leverage reporting capabilities from their merchant providers to uncover transaction data that informs their business planning. Some merchant services partners may even offer short-term financing solutions to provide immediate working capital for your business.

While partnerships available through your bank are key, it’s also important to focus on maximizing your existing supplier relationships. Many business owners may find that their suppliers can offer prompt payment discounts if the business agrees to pay them early. Negotiating a deal like this is a win-win. Your supplier gets paid faster and you save additional money that goes toward your bottom line. Remaining aware of these opportunities can go a long way for your business.

Consider How Your Personal and Professional Lives Intersect.

Considering which financial strategy is right for your business with an eye towards your personal goals will enable you to make smarter, well-rounded, long-term decisions.

The nature of small business ownership often requires that personal and professional finances be closely intertwined. This means that financing and cash management solutions that you implement today could impact both aspects of your financial life, not just during your business career, but through retirement and other personal milestones. After the disruption of the COVID pandemic, this intersection may be even more pronounced, and protecting your holistic financial health when making business decisions is more important than ever.

Look out for financial solutions related to your business that can benefit you in the long run. Establishing and making frequent contributions to tax-advantaged accounts like Roth or SEP IRAs over the life of your business can pay off later in life. A 401(k) and other similar profit-sharing programs can provide you with financial stability while also incentivizing your employees to remain with you long term. Additionally, no matter what stage of your business you’re in, considering an eventual succession plan today will allow you to have more control over your post-business life.

Adam recommends that business owners have these conversations with their advisors and maintain a clear vision for how their personal and professional priorities can coexist and how the current direction of their business can support all of their financial goals.

The Bottom Line

Landing on the right financial strategy for your business can be challenging. Selecting a financing solution or cash management tool that will work for you requires a thorough evaluation of your business goals, and what works for one business may not work for you. But business owners who are organized, open to working with new tools and new partners, and willing to consider every piece of their financial puzzle in their business planning will be better prepared to select a financial strategy that meets their unique needs, throughout the life of their business and beyond.

To discuss additional strategies for managing your finances and growing your business, contact your Relationship Banker or get in touch with Santander Small Business Banking today.

This article is for promotional purposes only. Santander Bank, N.A. (“Santander”) does not provide investment, business, financial, accounting, tax, or legal advice and the content of this article does not constitute investment, business, financial, accounting, tax, or legal advice. Santander does not make any claims, promises, or guarantees about the accuracy, completeness, currency, or adequacy of any content. Santander expressly disclaims all express and implied warranties of accuracy, completeness, currency, or adequacy of the information and content in this article. Readers should consult their own attorneys or tax or other advisors regarding the applicability of any referenced information or financial or other strategies to their own unique circumstances. This article does not necessarily reflect the views or endorsement of Santander.

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