7 ways to improve your pub or bar’s cash flow

In Pubs and Bars across the country, with so many daily transactions for food and drink to process, it can be easy to get lost in the day to day cash flow of the business.

After all, the hospitality sector, like so many can be the victim of cash flow problems caused by late payments, fluctuations in pricing and slow sales days. So keeping on top of your business cash flow is vital.

Coronavirus has hit Pubs and Clubs hard and with more and more card transactions taking place as consumers move away from physical cash payments, it can be difficult to manage your businesses cash flow accordingly. Which is why, at Momentum Bookkeeping, we have put together some useful tips and suggestions to help Pubs and Bars to improve their cash flow.

1 – Look at all your overheads in detail.

Every business manages to spend money on something they don’t need. If you review your business outgoings, covering everything from staff to the spirits you sell in order to see where any inefficiencies may be, you may be surprised by what you find. A simple review can be all it take to highlight a lot of needless spending.

2 – Negotiate payment terms with suppliers.

Some suppliers may not want to budge on price and discounting. But they may be flexible on payment terms. Being able to pay for products in manageable time slots can make it easier to manage your pub or bar cashflow and avoid you leaving your business bank account drained by heavy payments that all occur at the same time.

3 – Update your offers – not your pricing.

Raising prices can scare customers away whereas special offers and promo deals can bring in new customer and increase the usual spend of existing customers. While there are restrictions over what kind of promotions you can offer in a pub or bar, it can make a big difference to sales when you find that ideal balance of price and special offer.

4 – Understand the difference between profit and cash flow.

Profit and cash flow are different. Yet too many Pubs and Bars struggle to see the difference in the two until it is too late. A healthy cash flow can help a business survive into the long term. So if you don’t understand the difference – understand the difference!

5 – Use up-selling techniques.

Instead of waiting for a customer to make up their mind on which pint to order, make a suggestion on a special offer or give me the option of a top level brand alternative. In restaurant environments, suggesting a particular wine that goes well with a food order (or vice versa) can help increase a sales total for a table sitting.

6 – Use standard measuring systems.

Whether it is wine glasses with etched plimsoll lines or using measuring dispensers for spirits, being able to more accurately control the measures distributed can significantly cut down on liquid wastage and increase your profits. It may seem like ‘small change’ but a weeks worth of over fill and liquid spillage can really add up.

7 – Monitor slow selling stock.

If you find a particular drinks brand is moving slowly or a meal on the food menu is rarely ordered, change it up. Think of stock as tied up money and the more dynamic you are to addressing these issues, the better you can manage your cash flow.

Of course, if this all seems like too much to handle on your own then there are alternative options. One of which is Momentum Bookkeeping. You may be thinking what does a bookkeeper have to do with cash flow. But cash flow is a huge part of bookkeeping and we are more than just another bookkeepers.

Whether it’s getting paid by your customers on time, completing your VAT returns, processing payroll or submitting your annual accounts and tax returns, the demands on businesses can seem endless. And it’s almost certainly not why you got into business in the first place. It is, however, exactly why we got into business. We do the things you avoid because where your business is concerned, you do the real work, we do the paperwork.

To find out more about how we can help and to arrange a meeting to discuss how we can help, simply pick up the phone and call us today.