But if profits are down—which can happen in Q1 of a new year—cutting full time employee hours may be an option to consider. 

Here are five key things to know, from how to tell an employee you are cutting their hours to how to use attendance tracking software to make those adjustments globally. 

1. Know the answer: Can you cut an employee’s hours legally? 

Before you make the move to cut hours, know the law in your state. In general, business owners can cut employee hours to whatever point is necessary—as long as no one’s working for less than minimum wage.  

• If you cut hours for salaried employees, that alone won’t affect their pay. You can also cut their pay too, but know that if you cut it below a certain level, they become hourly workers, which entitles them to overtime.
• If you have union workers, consult the union contract to ensure you adhere to advance-notice stipulations. 

When it comes to telling an employee you are cutting their hours, balance the law with what feels right. In some states, you’re legally required to give warning that you’re cutting full time employee hours. But even if the law in your state doesn’t require it, offering notice as far in advance as you can is a good way to foster trust.

2. Cut costs elsewhere first

If you’re cutting full time employee hours because your business is experiencing tough financial times, consider cutting costs in other areas before you cut hours. Proving to employees that you’re willing to make tough calls before you dip into their pockets shows that you appreciate the work they do and the loyalty they’ve shown. 

3. Give context to cut hours

Once you’ve made the call to cut hours, make sure to give your employees reasoning as to why. 

• If you’re cutting employee hours because the industry or economy is experiencing a downturn, transparency is your friend. Give employees the facts, and ask if anyone has ideas on how to bridge the gap. You might even be able to turn adversity into opportunity if you have creative employees on your payroll who come up with ideas to make up the difference. 
• The same is true if it’s just your company that’s experiencing financial difficulties. Talk to your employees frankly about what you’re going through and you’ll foster understanding while making them more receptive to cut hours. 
• If you’re cutting full time employee hours in order to boost profits for a business that’s already doing well, offer employees another benefit to make up for cut hours. Consider a wage increase, a more flexible work schedule or increased work-from-home capabilities. 

4. Be strategic with which employee hours you cut

If you’re cutting employee hours to stay financially solvent, try to reduce hours evenly across all positions and departments. If everyone’s hours and pay are cut to some degree, you’ll ensure no one feels singled out, and you may even create camaraderie around weathering the storm together. 

If a uniform approach isn’t possible, be strategic. If you’ve already identified employees who have a bad attitude or who jump at any opportunity to go home early, they may be more open to taking days or hours off. Frame this as an opportunity for increased freedom and flexibility and you may avoid an issue altogether.

5. Make the change easy with attendance tracking software

Once you’ve made the tough decision to cut hours, you should be able to quickly apply the change across the board through your attendance tracking software. 

With a solution like Time Tracker, you can easily manage employee time entries from one convenient location before syncing with your payroll and accounting software, and that includes updating hourly rates. 

• Use your attendance tracking software to let employees clock in and out from any location.
• Capture every second worked with timers, which you’ll set to automatically sync with then new rates associated with cut hours. 
• Once you’re able to return to normal pay, update the system to apply those changes universally ASAP. 

If your company doesn’t currently use attendance tracking software, you should absolutely try that before you start cutting hours. Time Tracker has been shown to save 30+ hours in administration every month, and for some companies, that time may be enough to save you from having to cut hours at all. 

Try a free, 14-day Time Tracker trial today and put us to the test. 

The post Cutting Employee Hours: 5 Things to Know Before You Start to Cut Hours appeared first on eBillity.

Whether you’re looking for an increase in accounts payable cash flow or you’re trying to find the right attendance tracking software, a few key tactics can make a big difference. 

How to increase cash flow in business: 7 tips and tactics 

1. Document your process

Before you can increase cash flow, you have to understand it. Start by documenting your processes and writing a strategic plan. 

If you need help figuring out how to do either, bookmark these articles to read later:

• Why Is Strategic Planning Important and What Are the Steps?
• How to Document a Process in 10 Steps: Why Process Documentation Matters

Next, create a schedule that includes looking at any decrease or increase in accounts receivable cash flow and in accounts payable. 

Finally, consider implementing an accounting program and/or an integrated cloud-based payment system to streamline your process. Businesses that switch to automated payment systems often get paid twice as fast as those who process payments by hand.

2. Assess your short-term cash flow

Take a critical look at your short-term cash flow. 

• Identify which regular expenses are costing you more money than they should and which are on-target. 
• Make a list of the high-cost items and take action to change them.

Ask to renegotiate rates with a vendor or downsize an office space that’s larger than it needs to be — whatever it takes to decrease costs and increase cash flow.  

3. Ask for payment promptly

When it comes to learning how to increase cash flow in business, invoices are key. The quicker invoices go out, the faster cash comes in. Every increase in accounts receivable cash flow depends on invoice efficiency. 

Foster prompt payments by:

• Asking for payment as soon as possible, ideally using automated invoices
• Sending invoice reminders a few days before an invoice is due, on its due date and a few days after, and following up with phone calls as needed
• Giving customers incentives such as small discounts for paying invoices early
• Charging late payment fees

4. Be strategic with vendor payments

Do your vendors offer a discount for paying early? If you take advantage of those, you can quickly see an increase in account payable cash flow. If not and your vendors don’t apply discounts or penalties, make payments when it’s best for your business.

5. Consider your debt and credit

Debt

If you owe lenders money, talk to them about negotiating a lower interest rate to increase cash flow, or discuss available options for extending the payback period. 

Credit

If you think cash flow may become an issue in the near future, apply for a line of credit. The best time to apply for a line of credit is before you need it, and you won’t pay anything until you use the money.

6. Check your pricing structure

When you’re wondering how to increase cash flow, it’s obvious that increasing prices is the fastest way to boost revenue. But before you overhaul your pricing structure, check in with your business and your market. Ask yourself: 

• What are my competitors charging?
• Are you in line with your industry or are you way above or below the mark? 
• Are my prices too low? 
• If they are, you may be making your business appear to have less expertise than it actually does.
• When’s the last time I raised prices? 

If it’s been a while, clients are likely to be more receptive to an increase. Just be sure to market the fact that it’s been three or four years since prices went up before you announce it.

7. Use integrated attendance tracking software

As you evaluate your pricing structure, consider the role time tracking plays. 

• How much time are your employees spending on a certain client or project? 
• Are you charging enough to cover that time? 
• More importantly, are you charging enough to make a profit? 

The right attendance tracking software will help you answer all those questions. 

With Time Tracker, you can turn employees’ time into billable hours in seconds. Time Tracker will:

• Sync data every few minutes
• Connect with accounting software such as Quickbooks or Xero
• Automate payment reminders via editable templates
• Connect with Stripe so clients can pay instantly
• Generate real-time reports so you can see the status of outstanding invoices 

Add that to all of Time Tracker’s other features and it can save you 30+ hours a month in administration. 

Try Time Tracker today

Ready to learn how Time Tracker can help you increase cash flow in business? Try our free, 14-day trial.

The post How to Increase Cash Flow in Business: 7 Steps to Take Right Now appeared first on eBillity.