Cash Flow Management Tips During Inflation

Lately I have been getting a lot more questions and comments about cash flow given the current rate of inflation. There have even been some concerns about the possibility of a recession, and how that will affect businesses that are coming off of two years of lower-than-average gross revenue. Right now, with interest rates rising as the Federal Reserve tries to control inflation, even short-term loans are costing a lot more than many businesses can afford. So, what does a business leader do? Stop spending? Not exactly.

Here are a few tips:

Watch Your Expenses

Accountants can measure what we refer to as your cash burn rate. That is the rate at which a company is using its cash reserves or cash balance. Essentially, it’s a measure of negative cash flow, and it helps us predict how long your cash reserves will last before they are exhausted. We use it to guide you with regard to expenditures, especially larger purchases.

Reduce Your Taxes

After an analysis of how much you will owe in taxes for any given year – or even quarter – and depending on your business type, we may be able to help reduce your tax payments with a lower risk of underpayment penalty. That’s because our Certified Tax Planners are specially trained to be able to find every deduction and credit you will be entitled to and use those amounts to your favor.

We can help you increase the available cash in your business, reduce your overall tax burden, or both. One way we can do this is by conducting a cost segregation study and ensuring that you are taking advantage of improvement credits to any property you may own that you had to renovate. Sometimes we are able to find the money for you to make those renovations based on the tax savings we anticipate you will have as a result of taking that credit. But there are other ways to reduce your taxes as well, and we are always happy to have a conversation with you about that. Sometimes we even find overpayment amounts from a previous year that can be applied to the current year.

Leverage Research and Development Activities

Your company does not need to be in a scientific research industry to be able to claim a Research and Development (R&D) Tax Credit. You could be eligible for certain manufacturing or development activities that create any improvement to a product or process. Hundley advisors has professionals who can examine your business for activities that fall under the R&D Tax Credit eligibility guidelines and recapture as much as $250,000.

Any of these – or other – business advisory services may be available to you and the determination of your eligibility is just a pone call away. If you are feeling the pinch of inflation, let’s talk. A fifteen-minute call may be the answer you’ve been looking for. Set that call up here and we’ll get started right away.