Managing Your Business Cash Flow
Business cash flow is an important aspect of your business. It is something that should be managed well. You can hire an accountant to do the job.
This would be easier on your part since you will be dealing with complicated matters. If you plan to do this alone, then it is best if you know some of the basics of it.
No matter where your business stands in the world ranking, cash is the lifeblood of your business. From a multi-billion dollar empire of Bill Gates to a tiny street ice cream shop, you’re required to have a complete, detailed and defined record of the cash. In today’s financial crises, new businesses are getting very confined space to flourish. New businesses are seen closed in less than six years. Work-from-home businesses have dropped down their activities in just six months.
The main reason why these horror stories take place is the bad and poor management of cash flow. Accounting has dedicated a good portion of studies on ‘cash flow’. In this subject you are taught with the skills and techniques of managing your cash in the most perfect and efficient manner. You can have a professional CPA in your firm managing the flow of cash in a learned and skilled manner. But if you are not able to afford a CPA or some other Chartered Accountant for your firm, then you should take care of few layman concepts. In this article we will give you some of these laymen concepts.
Fast Collection of “Accounts Receivable”
We all are aware of the “Accounts Receivable” account in the balance sheet. In order to efficiently manage the cash flow of your business, you should make fast collections of these ‘accounts receivables’. If people don’t pay businesses quickly, the balance sheet keeps on accumulating the amount to the preceding months’ balance sheets. This adds up the amount, cases of which you will be confronting the coming month.
Therefore, you should always try to collect ‘as fast as possible’ collections of cash from your customers.
Fast Depositing for Check
You should deposit the check in your bank account as soon you receive it in your hand. Delaying the submission of check will add to the total time of receiving money. This will again add to the balance sheet of next month and you will be having more affairs to deal with the next month. Also, you should not deposit the checks in ATMs as they are a delayed method of payment. You should try your best to make the whole scenario as fast as possible.
You should be slow while making payments. Write checks in future dates. This will give the maximum numbers to “Cash” account of your balance sheet for the current month.
Use your Money Intelligently
Instead of keeping your money in bank accounts, you should use it somewhere else efficiently. But make sure your money is safe wherever it is. Either you can buy bonds or some other safe commodities which can yield more or at least equal amount of money when withdrawn.
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