cashflow

5 Rules for Managing Cashflow

Far too many business owners make financial decisions based on their bank account balance. But that figure is constantly in flux. It only represents the funds you have at that moment but not the funds that will soon enter and exit your bank account as you pay your expenses and revenue is received. Instead you should base your decisions on your business’s cashflow – the figure that accounts for the funds you have at the moment, in addition to the funds you will eventually pay and receive.

Bills are easy to handle since it’s up to you as the business owner to pay them before their due dates. But in order to have the necessary funds to pay your expenses, you need your customers to settle their invoices in a reasonable timeframe. Collecting your revenue in an efficient and timely manner is the key to maintaining a healthy cashflow.

Here are five tips for getting your invoices paid faster and keeping your cashflow strong:

1. Keep your books accurate and up-to-date

You can never hope to understand your cashflow without well-kept financial records and detailed accounting reports.

Don’t fall behind on your accounting and bookkeeping responsibilities. The more effort you put into keeping and analyzing your books, the stronger your understanding of your business’s finances will be. You should strive to know your books so well that a quick review of them will give you an understanding of your cashflow.

2. Send firm and friendly reminders

When sending invoice reminders, be direct and fair without being a pushover. A firm yet friendly follow-up strategy usually gets the customer to do their part and pay the invoice. If not, you can take more formal action.

You can keep track of what you’re owed by always monitoring your accounts receivable turnover. If it’s trending up, it’s likely time to send reminders to the customers with open invoices. As receivables age, their quality goes down, so it’s best to act sooner rather than later.

3. Keep your accounting simple

If you’re struggling with recordkeeping, get accounting software that makes the task easier and consider hiring a professional to help you use it.

A reliable accounting system combined with the knowledge and experience of an expert bookkeeper will help you track and report on key business metrics, including your cashflow.

4. Keep your business and personal finances separate

All your business funds should move in and out of a dedicated business bank account. Mixing your business and personal finances makes it very difficult to assess your business’s performance. You can learn more about the importance of keeping business and personal finances separate in this blog post.

5. Set aside a cash reserve

One of the best ways to stay on top of your cashflow is to keep a surplus of cash on hand.  

Your reserve can help you weather unexpected situations that come up in the course of running your business. It can also give you more confidence when it comes time for your business to take the next step because you’ll know you have the extra financial cushion available.

The saying “cashflow is king” might be trite but it certainly is true. Following the five rules above will help ensure that your cash serves you – rather than the other way around.

BookKeeping Express (BKE) can help you track your revenue and manage your expenses. We’ll recommend accounting software and other financial technology that will make it easy for you to stay in touch with your business’s cashflow. Contact us today to schedule a free consultation. 

 

7 Tips for the On-the-Go Business Owner

Not long ago, most business owners needed a dedicated space to work from. But these days, it’s easier than ever to get things done over the internet. While traditional offices are still common, many business owners are choosing to work while on the go instead. Equipped with a laptop, mobile phone, and a tablet, you can setup at a coffee shop or library and take care of most your business responsibilities.

Working remotely takes some getting used to. With that in mind, we’ve compiled seven tips for the fledgling on-the-go business owner.

1. Pack everything you need for the day

When you work in an office or at home, you’re used to having pretty much everything you need within the building. But when you work remotely, you’ll have to carry all your daily necessities with you.

Be sure you don’t leave the house without packing everything you need to get your work done, as well as everything you need to stay comfortable throughout the day. It’s a good idea to make a list and double-check it before you head out for the day.

2. Use mobile apps

When you work on the go, the majority of your business is going to run through your mobile phone and tablet. You’ll use it to stay in touch with customers and colleagues and to manage your business responsibilities.

The “there’s an app for that” iPhone slogan is even more true now than it was when Apple first started using it in 2009. Apps like email, calendar, maps, and mobile banking are staples on most people’s phones but there are probably other ones that can help you run your specific business. If you have any responsibilities that you struggle to accomplish efficiently, try searching for an app that can make it easier.

3. Your finances on the go

There are numerous financial apps that can help you manage your cashflow while out and about. Using accounting, bill payment, expense management and invoicing apps, you can make sure you never lose touch with your business’s financial situation. And instead of setting aside office time to review your outstanding invoices and pay your bills, you can do it from your phone when you have a free moment.

4. Stay charged

Your laptop, phone, or tablet do you no good when the battery is out of juice. Be sure you charge all your devices before you leave home and to carry all the power cords with you. Full batteries across all your devices should hopefully get you through a complete workday but you can always plug-in at a coffee shop or library, if you have to.

5. Stay secure

It’s crucial that you protect your business and personal information when working on a public network. One of the first things you so do is turn off your laptop’s sharing setting. It’s great to be able to connect to wireless printers and hard drives when you’re on a private network but unfortunately this feature has far more risk than benefit on public wifi. From there, you can build additional security layers using a Virtual Private Network (VPN) or Firewall.

6. Track your mileage

If your business requires you to drive between offices, meetings, or job sites, there’s a good chance you can claim a mileage deduction on your business taxes. You can learn more about the mileage deduction and how to qualify in this blog post.

7. Nothing replaces the in-person meeting

For as great as technology is, there will still be times you need to meet with a colleague, customer, or partner and have a face-to-face conversation. When the needs for these meetings comes up, it’s a good idea to have a preferred location in mind. It might be a cafe, restaurant, or even your home.

Working on the go can be a welcomed change from the confines of an office. Just be sure you’re completely prepared to get your job done while you’re on the move.  

BookKeeping Express (BKE) provides accounting and bookkeeping services for businesses. We can help manage your finances and recommend software and mobile applications that can help you run your business with ease. Contact us today to learn more.