Managing cash is the foremost task of any small business, simply because no business can carry on without cash. Here are some simple things you can do to ensure that your business always has a positive cash flow.
- Pay Attention to Your Bookkeeping– Small business bookkeeping makes sure that you have your finger on the pulse of your business at all times. You should make it a habit to reconcile cash daily or at least weekly. If you do so, you will know where you stand financially and can take adequate action when necessary. Timely small business bookkeeping will also help you make informed business decisions that are sure to help your business turn out more money.
- Collect on Overdue Payments– You know how much of a drain overdue payments are on your business. Managing unpaid payments effectively is important to keep your business healthy. Make sure you have a strict receivables management policy in place and routinely follow up on overdue clients. Having a proper follow up schedule is important if you want to see anything of the payments due to you. Persistence and planning is vital in collection efforts.
- Forecast Future– Most businesses see a pattern in cash flow trends, mostly seasonal. As a business owner, this can be very useful in predicting cash flow and consumer behaviour and planning business action. And what’s the best way to identify these trends? Your small business bookkeeping of course. Your books are a treasure trove of financial information and you can easily decipher it if you set your mind to it.
No business can function without money; money is the backbone of every business and as a business owner, you need to be able to understand the money and how it enters and leaves your organization. Though it might seem to be a terrifying prospect, it is not really- all you need is to be dedicated to the cause. Once you get a hang of small business bookkeeping, you will have a better understanding of your business itself.