Small Business Cash Flow: Easy Tips to Analyze and Monitor Your Money
Running a small business feels a bit like spinning plates at times and you have to keep your eye on so many different things all at once.
That is one reason why you might feel like you don’t have the time or resources available to be able to carry out a cash flow analysis on a regular basis, but you need to find a way to keep track of your money if you are going to stay in control of your business.
Here is a look at some easy ways to track your expenses and monitor your cash flow. There is an overview of the importance of cash flow in your business, plus some suggested solutions to automate and simplify the task of gathering the data you need for an accurate picture of your finances.
Keeping an eye on your money
No business can survive for any prolonged period of time without having a positive flow.
Analyzing your cash flow shows you exactly how you are spending your money and how much money you have got coming in to cover it. If the cash outflow figure is higher than the cash inflow number, it is telling you that you are going to run out of cash and might not be able to pay your bills and wages.
Cash flow is the heartbeat of your business and If you don’t have a way of accurately monitoring this situation and knowing exactly where you stand with your finances in real-time, you can’t be expected to keep all of those plates spinning for as long as you would want to.
The better approach is to be proactive and find a way to track your expenses so that you know how much cash you are spending and how much cash you need to keep things ticking over in your business and pay all of your bills.
A time-saving solution
You will no doubt be aware that there are a variety of small business finance options available but there is one short-term solution that could be good for your cash flow and also help you to keep track of your expenses at the same time.
If you have a business credit card this could make it simple to see what you are spending as you will have all of your expenses listed in the one place, without having to add up all the receipts, which can be time-consuming.
In addition to this, if you use the card sensibly it can help your cash flow. This is because you will be borrowing against the card without incurring interest charges if you pay the balance back by the due date.
Make data gathering easier
It would also make a lot of sense to use a software program that is designed for the task of calculating your inflows and outflows and producing a cash flow statement.
You will have to spend a bit of time inputting the basic information but a good program will then be able to use that data to give you a useful insight into where you stand with your finances. It also makes it easier to project what money you will need to cover all of your overheads and what money is expected in to cover those liabilities.
Good cash flow is vital for any business so find a way to keep on top of your expenses and make use of the help available to make that task easier.
John Pearce is a business consultant who keeps his clients on the right track and focusing on the important things when it comes to growing and maintaining a business.