11th May 2023
Small business owners will use a variety of methods to keep on top of the financial position in their business from software to spreadsheets, but quite often they look at what’s happened in the past and not what is going to happen in the future, and by doing so they miss the most important tool in the box. A business cashflow.
I have kept a cashflow for my business from day one and here are some of the reasons why I’d urge every business owner to create one and use it every month to track what they have spent and what they will be spending and earning for the rest of the year.
Before making any business decision that involves a cash outlay you should always be able to view your cashflow and plan the effect the spend might have. That way you know that the affordability of your plan is covered and its not going have a detrimental effect on the rest of your business.
Many of my clients find it reassuring to have an up-to-date cashflow so they don’t worry about their future income as much as they have it all planned in advance and can see what’s coming.
If you want to grow your business or maybe put up your fees to your customers, you can model the various scenarios on your cashflow and see if it works.
A small business can run a cashflow from a simple spreadsheet or you can use software that will do it for you for a small fee. The software based cashflows will learn from what you spend each month and link into your bookkeeping software to save on data entry and are great for modelling different options.
In my coaching sessions with clients I often help them set up a cashflow and train them how to use it to track and budget and get a better perspective on their business.
If you would like help to create a cashflow for your business, then let me know?
have you read our previous post?