Accountant, Bookkeeper or CPA?
What is the difference between these three, and what does your business need?
This is often an area that confuses business owners. Check out this week's episode as we dive into this topic and provide clarity.
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Episode Show Notes :
4 Things that can lead to better Cashflow
When it comes to cash flow, every business has to keep a close eye on this or at least have a process for monitoring the trends in their cash flow. Now for those that don’t fully understand what cash flow is think of it this way CashFlow is a visual and switch the words around it is simply the flow of cash IN & OUT of your business.
Now that we know what cashflow is, the next question is how you improve it well; here are a few tips to help you:
Make a list - a very practical yet commonly overlooked tip that you can easily apply is to make a list of all of the ways that cash comes in and goes out of your business:
Cash Out - Payroll, Business Expenses, Taxes, Fees, Software, etc
Cash In - customers pay their invoices, loans, sell assets, grants, awards
Once you have your list ask yourself some tough questions about your Cash Out List- Is there anything in the Cash Out list that I can avoid
Divide your cash-out list into these three categories
Essential - these are things you cannot run your business without (rent, utilities, software systems, etc.).
Cash Generators - expenses that help you create more revenue (marketing expenses, contractors, employees) - spend money to make money type expenses.
Nice to have - these are expenses you can do without but help you run your business more efficiently (i.e., calendly, scheduling tools, marketing)
Others - everything else that does not fit in the categories above - here is where you want to start.
On the Cash In side, ask yourself
What is my process for following up with customers who have not paid their invoices - if you don’t ask, they probably won’t pay
Customers have a habit of not paying
How do we limit the amount of time and effort that we spend on clients that have a habit of not paying their invoices in a timely manner?
Repeat this process regularly
A simple explanation of what is cashflow
Why does cashflow matter, and what happens when cashflow is neglected (ugly money, poor decisions, missed opportunities)