Who controls your financials?
Chapter 2 – Financial Control – Rule your money
This is part of the ‘How to’ coaching series. An ongoing series of activities to make your business successful. Follow it step by step and see positive results as you develop a robust business model, set on a solid foundation.
Activity 40 – I regularly review my Cash flow position……monthly
The flow of cash through your business is it’s lifeblood. Without cash, you don’t have a business.
So, if cash is so important, why do so few businesses run a regular monitoring and reporting system?
Some business owners are in denial (also the title of a book – Denial, not a river in Egypt). It is easier to ‘hope’ things are ok.
You can make a loss in business many times, but you can run out of cash only once before it’s all over.
When you know what cash is due in/out and by when, you can make intelligent decisions for the success of your business. You then know when you will be able to pay bills and make investments. You will also see when you can pay yourself and still have money available to run your company.
The HowTo bit:
If you are using something like Xero, you can get a cashflow report. You could then use a 3rd party app such as Float.
Personally, I use a spreadsheet that I load with known, expected and planned income/costs for the year ahead to give a forecast of how the cash is flowing in and out. I update it weekly/monthly and roll it forward by one month at the start of the new month.
The key is to make the review process a habit – create a regular time in your diary.
If you would like a copy of my spreadsheet and/or to find out more about setting up your own cashflow review process, Contact Us…
