All business enthusiasts have heard the phrase “Cash is King”. This seasoned expression may hold more weight then you give it credit for. When managing finances for a business of any size, cash takes the front seat. Monitoring and controlling your cash flow is an essential duty of any successful business owner. Cash flow is usually understood to be the total amount of cash that is generated and received by a company, along with the amount of cash that is used for expenses of the organization. Maintaining a consistent understanding of cash flow allows you to paint an accurate picture of financial status and make reliable projections. The experts at Behm Bookkeeping discovered an article detailing the ‘10 Rules of Cash Flow’. We’ve selected a few of our favorite accounting tips from the material to share with other small business owners.
For the “10 Rules of Cash Flow 101”, check out the original article.
Know the Current Cash Balance
As a business owner, you should know the current cash balance each and every day. Don’t try to do it in your head: the accurate information should be readily available to you if you are managing your finances correctly. It’s much easier to fail if you are basing business decisions on cash balances that are inaccurate. Know your balance – every day.
Do Today’s Work Today
In order to keep an accurate cash balance in your accounting system, it is essential make a habit of being timely. All transactions and spending should be accounted for in a timely fashion to avoid losing information, inevitable forgetfulness, and inaccurate information. The ability to make sound financial decisions stems from diligent maintenance with your records and money management. If you always keep your cash balance current, you will always have good, reliable information when making decisions.
Do the Work or Get Someone Else
If you find it difficult to be diligent with your bookkeeping, our advice is simple: hire someone else to do it! A qualified bookkeeper is an asset to any small business and will save you time and stress.
Make Projections and Stay ‘Future-Minded’
What do you expect your cash balance to be six months from now? Keeping a future-oriented outlook will change the way you make decisions and the way you run your business. Projections are of great value to your finances, as long as they are based on accurate and reliable information. Conducting frequent analyses of cash flow and noticing patterns, changes, or discrepancies will keep you informed about the current and future financial situation of your business. Cash flow problems do not appear out of nowhere – remember your projections and use them to make financially responsible business decisions.
Managing cash flow is a staple for any business. Successful business owners commit to organizing their finances themselves or choose to hire a professional bookkeeper to monitor the monetary functions of their business. Behm Bookkeeping provides professional, reliable bookkeeping services to small businesses in Mesa, Gilbert, Queen Creek, Chandler, and Prescott! Give us a call today! 480.323.9189