Monitoring Your Business Cash Flow – Practical Tips for Startups

Monitoring Your Business Cash Flow – Practical Tips for Startups

Picture of Daven Michaels

Daven Michaels

New York Times Bestselling Author, 30-year business veteran, and Executive Chairman of CurrentC Group.

Monitoring cash flow in business is very important. That’s the major way to discover where your business is at the moment and where it is headed in the nearest future. Many startups prefer to outsource cash flow monitoring from the onset, especially those with no skill of how it works.

For successful cash flow monitoring, here are some result-oriented steps for startups and just any business owner;

Step #1: Use Accounting Software to Keep Records

Record keeping is the starting point for successful cash flow monitoring. These days, the task is a lot easier with accounting tools and software programs. The programs will not just track your business transactions and cash flow but will also calculate them automatically. Float, Quickbooks, and Pulse are some notable programs you can engage in for cash flow management. A number of programs will generate cash flow statements automatically at the end of each month.

Step #2: Assign Someone to Monitor all Transactions

In order to predict, monitor and successfully manage cash flow in a business, someone must be responsible for the task. In essence, there should be someone tracking all transactions, including what comes in and what goes out. You should know that record keeping is time-consuming and will leave you with little or no time to attend to your chore tasks. This is where most start-ups make a smarter decision to outsource recording keeping and accounting in general.

Tip #3: Get Expert Service

If your business is just kicking off, you would nearly dent your pocket hiring a financial manager in-house. While a big company can afford to do so, it’s still in the best of its interest to outsource financial matters to an independent financial manager. This is both money-saving and time-saving. The financial advisor will also advise you rightly on investment matters.

Tip #4: Make Predictions Earlier

If possible, you should go ahead and predict reduced cash flow sources. While it is not possible to predict all expenses, there are some you can actually predict and make the necessary preparations.

So, for those predictable ones, you should pen down predictable expenditures or purchases. Consequently, you can cut back other expenses or set money aside bit by bit to prepare for such anticipated expenses.

Here’s an instance; if you sell seasonal items such as winter wears, you will make fewer sales when summer sets in. To keep cash flowing in, you should make a switch to quick-selling summer clothing items and at the same time offer good discounts on the winter items. Another alternative is to apply for credit in advance when you foresee a shortfall.

These steps are good starting points for monitoring and ultimately managing your business cash flow successfully.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams

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