My Blog

Blog

« Back to Blog « Older Entry | Newer Entry »

Understanding Your Cashflow

Posted on July 2, 2014 at 1:55 AM


 Welcome to the month of July. We are done with the first half of the year and started the countdown to the remaining half of the year.

Our Newsletter for this month is on an integral part of every business; an area that is generally misunderstood by most business owners, but interestingly plays an important role in every organization. Have you taken time to look at your Cash flow Statement? Can you tell where Funds are disbursed in your Business? Do you understand the effect of your Spendings? The art of struggling to understand and manage your cash flow can be a huge distraction to your business; in this series, we will be providing you with quick tips on the basic method of understanding your cash flow.

  Our Areas of Concentration will be on:

 - Definition of Cash Flow
 - Drivers of Cash Flow in a Business
 - Facts about Cash Flow
 - Quick Tips on Understanding your Cash flow and applying it to your Business.
 - Managing your Cash Flow effectively.

 What is Cash Flow?

 Cash Flowis the movement of money into or out of a business, project or financial product, and can be measured at any specified period of time.

  The Following are the drivers of Cash flow in a Business:

  • Accounts Receivables (These are money owed to a Business by its customer, as a result of services provided or goods sold).
  • Inventory.
  • Accounts Payables (These are Vendor Payments, owed to vendors, for goods bought/services received on credit).
  • Capital Expenditures(Purchase of Equipments)
  • Borrowings/Debt Servicing.

  It is worthy to note that your Cash Flow originates from 3 Basic Operations:

 a) Cash Flow from Operations

 b) Cash Flow from Investing

 c) Cash flow from Financing

  Most Business Owners have problems with Understanding their Cash Flow because of the following facts: 

 a) A Profit or Loss in a Business does not equal Cash Flow.

 b) An Increase in Cash in your Business is not always good.

 c) A Decrease in Cash is not always bad. 

  Many Business Owners have problems understanding and interpreting their Cash flow, because of the technicalities involved; but I want to challenge you today, to take the simple test below, write down your answers and put it into practice, and watch your business grow; I bet you will be so thankful for this enlightenment:

  •   Focus on the TOP 3 changes in your Cash for the Month.
  •   Decide whether each change is good or bad.
  •   Write one line description of each change and look at the effect, it has on your Business.
  •   Once you are able to prove the effect of the change in your Business, hold on to the result and use it as a base, in your Decision making.

    By doing this exercise periodically, you will have a better grasp of your cash flow, and see its effect on your Business growth.  I will like you to try this exercise and forward your feedbacks. In my next article, I will be giving you tips on how to effectively manage your Cash flow in your Business.

    Please feel free to contact us, if you will need further help in understanding your Cash flow and producing your Cash Flow Report. We will love to help you.

   Remember: The best time to take control of your Cash Flow is RIGHT NOW.

   

 



 
 


 

 

Categories: Account Setup, Accounts Receivables, Balance Sheet Reporting, bookkeeping, bookkeeping,Tax Returns,QuickBooks,Bank Reconciliations,bookkeeping services,small business, Budgeting,Accounting,Business Planning, Business Budgeting, Business forecasting, Cash flow, Finance Management, Payroll, Personal Finances, QuickBooks Review, QuickBooks Setup, QuickBooks Software, QuickBooks,Small Business Bookkeeping,Bookkeepers rates,business decisions, Spending Wisely, Tax Preparation, Tracking your expenses

Post a Comment

Oops!

Oops, you forgot something.

Oops!

The words you entered did not match the given text. Please try again.

110 Comments

Reply Stock Trading Tips
9:58 AM on May 25, 2015 

You have some great information catching here.i will recommend my friends to visit this blog.I am not sure where you're getting this type of info but good topic. I needs to spend some time learning more or understanding more.
Reply Rosemary
4:43 PM on May 25, 2015 
Thanks for the great comments. I derive pleasure in educating people about managing and increasing their Cash flow. I am always inspired to write these articles and with my wealth of experience, I am able to put everything together to make great topics.I notice that each time, I am inspired to do this, People are motivated and this encourages me to do more. I really appreciate it and want to assure you that I will keep posting more informative articles. So Keep Checking back for more.
Reply Mcx Tips
7:10 AM on August 25, 2015 
I just found what I hoped for facing you know it at all is likely to appreciate it for those who add forums or anything, web site theme. A tones way for your client to communicate. Nice task..
Reply custom essay writing services australia
2:01 PM on June 9, 2018 
Your newsletter is so useful for me! You should continue sharing it here.
Reply uk perfect rolex watches
12:29 AM on July 15, 2018 
Your first blog is amazing.
Reply Luxury Holiday Destination Trip
5:45 AM on August 18, 2018 
If you want to go a long weekend than CHIS travel service best for you. For more details visit our website.
Reply custom research paper writing services
12:22 AM on February 24, 2019 
it’s very informative blog thanks for sharing with us.

Categories

ROSYAN BOOKKEEPING SERVICES  |  5620 St. Barnabas Rd, Suite 318 Oxon Hill , MD , 20745 USA  |  Phone (202) 422-4586 (301) 485-8109

/
Lightbox image