Three Tips on How to Start Understanding Cash Flow
Cash flow is the fuel of every business.
That’s why Business Made Simple connects cash flow to the Fuel Tanks of an airplane. Without fuel, a plane can’t fly. Without cash flow, businesses can’t lift off the ground. And as a business grows, finances become more complicated.
Zephyr Business Coaching offers coaching sessions for entrepreneurs on managing cash flow using separate checking or savings accounts for the five top needs of every business. By funding these accounts with revenue, the business will never run out of cash for all the priorities.
With the Cash Flow Made Simple playbook, business owners will know when overall profit is shrinking, know they have the money to pay taxes and payroll and know they can invest back into their business for growth.
From our certified coach, here are some tips on how to start managing cash flow and take control of your business.
Tip One: Have different accounts for different purposes.
Having all of your money in one place can bog down how you keep track of all your expenses and income. It also limits what you can do with your money.
We recommend that you separate your money into different accounts so those accounts are for a specific purpose. That way you can really see where your money is and how much you have to spend or reinvest. It will also help you better save money for larger expenses like taxes.
Tip Two: Have a system or process that you and your finance team know well.
Having a system you know well will help you know everything about your finances. And having an efficient system will help you delegate finance management to your bookkeepers or CPA without having to pull everything together last minute.
Using technology to your advantage here can make that process much easier.
Tip Three: Organize everything!
Part of your process should include where everything is organized. Using applications like Quickbooks or online software that lay out your money clearly will make your life much easier.
When you categorize your expenses, it will also show you where exactly everything is going. Being able to see that clearly can also help you make smarter decisions on how you spend your money.
Zephyr business coaching can give you tools to get organized so you always know your numbers! Through the coaching sessions, you can learn in-depth the best way to simplify your cash flow so your business runs smoothly and without the stress of unorganized finances.
If you allow your business expense receipts to pile up, your bank accounts to remain unreconciled, and your accounts receivable unmatched you'll never know if you have enough cash to take on the next great opportunity. Passing on opportunity deletes your company's value. We hope these tips help you get started on managing your money easier. Working with a business coach will also give you the opportunity to learn from experts and get personalized guidance for your business needs.
We're here to help you make your business soar! Free consultations are available for you here to start with cash flow as fuel for your business.
