Bank Balance vs. Cash Flow

Your Bank Balance does not show how much cash you actually have!




Wait, what? Yes I said it. The amount in your bank account is not indicative of how much cash you have available.



As a small business owner understanding how to manage your cash flow is essential to the long term survival of your business.  Without proper cash flow management you may soon find yourself in a lot of trouble. 

*Knocks on wood*


So, how do you ensure that you manage your cash flow efficiently? Here are three simple steps:


1. Do not use your bank balance to determine how much cash you actually have.

This brings us to point number 2...


2. Consider upcoming bills and expenses. I.e Plan for upcoming bills in advance. The best way to do this is by creating a system to track expenses. Using accounting software such as QuickBooks or Xero makes tracking your expenses so much easier! You can even download the app for whichever software you choose.

Managing your expenses will literally be at your fingertips.


3. Consider hiring an Accounting professional to help manage your cash flow even from the beginning. 


The truth is as your business begins to grow cash flow management will become more complicated and it is best to have an expert help you make sure you are doing things the right way. Plus, you get to focus on the parts of your business you are passionate about and leave it to the accountant to focus on the technical side of accounting.


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