October 19, 2023
You need Cashflow to run your Business
Without cashflow your business will cease to exist. So it's important to monitor the cash in your business and have an understanding of what impacts its movement.
Put really simply, your businesses cashflow is the Money coming IN minus the Money going OUT. And what's left you get to spend or invest.
Not knowing what your business cashflow is will place you at a disadvantage.
Knowing your cashflow has the advantage of being aware enough to spot pending issues, i.e. cash shortages, and taking corrective action before it becomes an uncomfortable crisis. Being aware also that you will have surplus funds in advance will see a whole world of pending opportunities open up, be it for personal use, business growth or investments.
Here are some pointers to keep your awareness on track.
Action 1: Keep Accurate Records
The first step in managing your cash flow is to keep accurate records. eCashbooks, you can easily record all your Money In and Money Out transactions. Knowing where your money is going is vital for effective management.
Action 2: Monitor Your Cash Flow
Regularly monitoring your cash flow will help you identify any potential shortfalls or surpluses. If your data is up to data you can easily ascertain your cash position for decision making.
Action 3: Plan Ahead
Planning ahead can help you avoid cash flow problems. You can forecast your future cash flow based on your past transactions and current financial situation. Knowing what potentially is around the corner will prevent any surprises that will disrupt your business.
Action 4: Manage Your Payables
Managing your payables effectively can improve your cash flow. Schedule your payments to avoid late fees and take advantage of early payment discounts. Don't be in a rush to make your payments, make the money work for you.
Action 5: Encourage Prompt Payment
Encouraging your customers to pay promptly can improve your cash flow. eCashbooks allows you to send automated emails to prompt your customers for payment.
Effective cash flow management doesn't come without effort. With these actions and the help of eCashbooks, you’ll be well on your way to understanding your business.
Have a look at eCashbooks now
Money IN
Can be loan fund or simply your sales. Sales can be by cash or on account. If it's on account, you'll need to be able to monitor the collections of those amounts.
Similarly,
Money OUT
Where you spend money paying off your bills, your taxes or your loans. Again, what to watch here are the bills you have that aren't due to be paid yet. A $1000 in the bank doesn't reflect where you are at if you still owe $2000.
eCashbooks will be providing a simple cashflow template in a future release.
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