4.What is the Difference between a Bookkeeper, Accountant & CPA and which one does my business need?

Air Date:

Jul 11, 2022

Duration:

21 Min

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

Takeaway points:

A simple explanation of what is cashflow
Why does cashflow matter, and what happens when cashflow is neglected (ugly money, poor decisions, missed opportunities)