Have you ever asked yourself at the end of the month, where did all of my cash go? In small business especially, one of the top ways that businesses can fail is not managing cash properly and not keeping enough stashed away for a rainy day.
I think I can help with this problem you may be having! One of the things I love about being a bookkeeper is that I can really see behind the curtain of a business and all of the moving parts. Cash makes those things move.
The businesses that I see that are successful do a few things often to make sure that cash is moving the right ways for them.
- Check your bank account every day. That simple. Login and see what the balance is, check for transactions that came out that you don’t recognize to dispute or call the company on, and see if deposits were made.
- Run a receivables report. See who owes you money! If you’ve already performed the service or sent them the product, then your money is sitting in their bank account. Don’t feel bad about sending follow-up emails, and maybe get payment ahead of time in the future.
- Run a profit and loss. See if you are making a profit every month! This doesn’t always mean you are making money, but if you’re consistently at a loss, then you know you’re not! Now, you have to have accurate data for this step to be worth it. If you are not sure if you have accurate data, you may want to have someone look over your financial statements to see if you are categorizing transactions correctly. If you think we could work well together, click the Apply button and send in an application!
- Check your subscriptions! Are you paying monthly for things that you don’t need for your business? I did this a few months ago and found almost $200 in subscription services that I could do for free or truly didn’t have the time for.
- Check your prices. Are you charging enough to cover materials, overhead AND your time? You may need to be bringing in more cash! Charge what your product is worth and be excellent at it!
Those are just a few things that I have seen businesses do that are successful with their cash management. You can have a successful business, but it takes a ton of effort and hard work to make it happen. Hopefully these tips give you a little shortcut on what to think about!