Cash Flow is incredibly important when running your own business.
It can be hard to manage for any sized business, leaving many opportunities to make simple mistakes. Having access to money in our bank account is very important for every business owner and we would all love to be able to manage our cash flow without any hiccups or problems.
But this is often just something that comes with practice and experience. We can all struggle to manage the different elements in our business on our own and cash flow is one of these issues that can often suffer.
Managing your cash flow is vital in running a successful business and having the available cash allows your business to grow.
Below are 4 little known factors that you may be doing in your business that could start to affect your cash flow if you aren’t careful.
Firstly, poor cash flow management can cause missed opportunities which ultimately could adversely impact your business.
In business, we sometimes need to make quick decisions when a great opportunity gets thrown our way. However, to do this you need to have ready access to liquid funds. This can otherwise leave you with issues in the long term. No business can afford to pay out more money than they have available to them.
Poor cash flow can therefore sometimes leave you having to miss out on these amazing opportunities, which eventually could start to impact your business.
The feeling of being disorganised is not great. We all like to feel that we have everything under control when often this just isn’t the case. And managing your money is something that can change month on month and can be hard to manage on your own, especially if you are new to running your own business.
Setting realistic amounts of money aside each month on a regular basis to cover your end of year tax bill is something we all have to think about when considering the money side of working for yourself.
Setting these funds aside can help us to feel more on top of things and not so stressed about the end of year accounting process. Knowing that you have ‘emergency money’ saved separately, like a buffer, for unexpected events or unforeseen expenses can be such a relief so don't underestimate its importance.
With so many tasks and clients taking your attention all day long, bookkeeping is often the last thing on your mind and the first thing to get left off your ‘must-do’ tasks.
Invoices, expense receipts and other paperwork can quickly pile up, so the temptation is often to tell yourself ‘I’ll do it tomorrow, next week or next month’ but this could prove costly in the long run.
Making sure you accurately and regularly check your income and expenses can seem like a large task, but it doesn’t have to be like that if you can create good habits and do it daily, and regularly keep on top of it.
Find a system and stick to it. Pocket PA is a great tool to use if you find money and cashflow overwhelming as it makes it so easy to manage and understand.
It’s definitely worth it in the long run as if this isn’t kept on top of, then you can quickly get into cash flow difficulties, making it more stressful and time-consuming month on month.
Sometimes we just need that little extra time spent planning, to help us focus on what’s really important. Having poorly defined targets, or worse still none at all, can be easily avoided if you give a little thought to what you need to allocate your time to.
Setting yourself small achievable targets, (for example, checking, your total income against your expenses) will allow you to become familiar with the money side of the business.
Understanding and recognising that money can sometimes be challenging is okay. Setting clear targets and breaking it down into smaller bite-sized tasks makes everything seem more manageable.
Using Pocket PA helps you get on top of your finances in a way that ensures you understand your money and doesn’t leave you feeling overwhelmed. Working smarter and not harder to achieve great cash-flow is possible to do when you use the right tools - so start a free 14-day trial now by registering now at PocketPA.com